10 Contract Covered Call With MOMO

I just learned about this stock yesterday while watching the Halftime Report on CNBC. Momo Inc. is a holding company. The Company operates Momo, a mobile-based social networking platform. The Company’s Momo platform includes its Momo mobile application and a range of related features, functionalities, tools and services that it provides to users, customers and platform partners. This is a growing social media company in China.

After looking into it a little I decided to take a 3 day, calculated risk trade. I bought 1000 shares of MOMO at $15.97 and sold 10 contracts of the 1/15/21 $16 Calls for a premium of 65¢ for $650.

Buy 1000 Shares MOMO @ $15.97

Sell to Open 10 MOMO 1/15/21 $16.00 C @ 65¢ (+$650)

For my first trade with this company I went with an At-the-Money Call. I’m in this trade for the premium only. The premium is a 4% Return on Investment (ROI). Not bad for a 3 day trade. If I get assigned, and I hope I do, I’ll make 3¢ on the stock sale.

I know very little about the company so I give this Covered call a Risk Factor 2.

I was going to buy another 100 shares for a Grasshopper trade but since it’s my first trading MOMO I decided to only trade it in my trading account.

As I write the stock’s up 18¢ from purchase price.

Successful trading,

Steve

The Options Coach