Sold Calls With SNAP & ZM
On 12/21 I sold a 10 contract $52 Put on Snap. That position expired on 12/24 with the stock at $50. The result was I had 1000 shares of Snap put to me at $52.
Today Goldman Sachs gave Snap a great report with a price target of $70. As a result the stock is up $5 as I write. I’m not a big Snap fan, and I didn’t think the stock was gonna be put to me, now that I’m in and the stock’s up I just sold a 10 contract Call. I sold 10 1/8/21 $56 Calls. I received a premium of $1.10. I could have gone with a lower Strike Price for a bigger premium, but with this Goldman report I think the stock can move. I’m in the stock at $52 and I sold the $56 Call for $1.10. If the stock moves and I get assigned I make $4 ($4000) on the stock and the $1.10 ($1100) premium for $5100. If that happens this will be a great deal.
Sell to Open 10 SNAP 1/8/21 $56.00 C @ $1.10 (+$1100)
This trade get’s a Risk Factor 1.
Back on 11/4 I bought 400 shares of Zoom at $508. I made a lot of money with ZM this year but the stock is way down from where I bought. My account is up big this year even with this stock down about $150 on me.
With the COVID vaccine in action the “stay at home” stocks are not doing as well. I want to make some of this ZM money back but not in this calendar year. With the stock at $358 I sold a 4 contract Call against my 400 shares. I sold 4 1/8/21 $380 Calls for a premium of $6 for $2400. This $2400 will go toward next year’s income.
Sell to Open 4 ZM 1/8/21 $380.00 C @ $6.00 (+$2400)
This is a volatile stock, and I sold $380 Calls on a stock I bought at $508, so this trade comes with some risk. This trade get’s a Risk Factor 4.
This is not the only risk I’ll get from this trade. I will be selling these 400 shares before the end of the week leaving this Call Naked. I’m selling the shares before the end of the year for the huge write-off. I will be back in the stock to make up more of the loss. I hope I don’t have to get back it to cover this Call before the 1st week in January.
I believe I’ll get about a $60,000 write-off getting out of this position. This, in addition to the write-off I took with my Peloton trade, will give me big help on my taxes. We’ll talk more about that in April.
To get these write-offs, and still be up well over 220% on the year, is fantastic.
Successful trading,
Steve
The Options Coach