Results Week Ending 12/24/20
I hope everyone had a great Christmas. COVID caused this year to be quite different, but I still had a great Christmas with my family.
2020 was a wild year coming to an end. This is the first season for me not coaching basketball in many years. I concentrated 100% on my trading, and my account shows it. This is the best year of trading I’ve ever had, and I’ve been trading a long time. I’ll be writing a full report at the end of the year.
With my huge gains this year I’m very concerned with tax season. I’ve been making moves already to help, but next week will be a big tax write-off week. This week I have a $5200 write-off but next week will be much bigger. I’ll be writing another post today that will cover my plan. All my write-off moves will not affect the gain in my account or affect my return percentage. The gains I have in my account already reflect the losses I’ll take.
This week’s loss is with Micron (MU). A few weeks ago I had a 10 contract Naked Call with MU. I was assigned but I did not own the stock to deliver. When in this situation your broker will borrow the shares to deliver to the Call buyer and your account will be Short. This is what happened with me. I let this happen intentionally because I wanted to Short MU. #1, I thought the stock was gonna move down. #2, I wanted to practice this move because I want to do it more with other stocks in 2021. When I accepted the Short position, I wrote that it might not work out well, but I still wanted to do it because I was up so much money and if it didn’t work out I’d have the write-off. Well, here we are, I got the write-off from the position not working, lol.
I Shorted the stock at $64 and it went up to $74. The stock backed off a bit and I exited at $70 with a $6000 loss. The way you exit a Short position is you buy the shares and your broker automatically returns them back to where they were borrowed from. At this point you have no position.
Micron
11/27/20 – Short 1000 Shares MU @ $64.00
12/22/20 – Buy 1000 Shares of MU @ $70.00
Loss -$6000
Snap
While Snap was on the Unusual Activity list I sold a 10 contract Put. The stock dropped below my Strike Price and the 1000 shares were put to me. I now own 1000 shares and I kept the premium of $800.
12/21/20 – Sell to Open 10 SNAP 12/24/20 $52.00 P @ 80¢ (+$800)
12/24/20 – Expired 10 SNAP 12/24/20 $52.00 P
Profit +$800
I had the 1000 shares put to me at the Strike Price of $52.
Total Weekly Loss -$5200
Another position I had expiring this week was a 20 contract Covered Call with Peloton. I did a Roll-out for a tax write-off. This is the subject of the report I’ll be writing today. Please watch for it!
Next week we start a new year. I think it’s safe to say everyone is happy to see 2020 leave. I had a great year in the market but I’m looking forward to 2021.
Enjoy the rest of the weekend!
Successful trading,
Steve
The Options Coach