I was filled on a couple of Grasshopper Trades, a 2 contract Covered Call with Harley Davidson (HOG) and a 2 contract with Xpeng (XPEV).
With HOG I bought 200 shares of the stock on 5/17/21 at $51.10. I bought the shares to do a Covered Call because there was unusual option activity. I sold Calls a few times but the stock dropped way back and it’s very difficult to get a good premium without the chance of losing money with assignment.
This is an investment that went bad. And to tell you the truth I’m sick of holding the stock. My account has been doing great lately so I decided to make a little premium with the stock even if I have a chance of losing money with assignment. I decided to do an In-the-Money Covered Call.
Having bought the stock at $51.10, I sold 2 HOG 8/20/21 $41.50 Call for a premium of 35¢ for $70. If I get assigned I’ll take a big hit on the stock sale. But like I wrote, I’m willing to lose money and move on with this one. If I don’t get assigned I’ll keep selling Calls until I do. I’ll either make money with the stock or move on and put the money to work elsewhere.
Sell to Open 2 HOG 8/20/21 $41.50 C @ 35¢ (+$70)
I did take in some premiums with this stock but if I get assigned I’ll lose $1920 on the stock sale. I give this trade a Risk Factor 4. The only reason it’s not a Risk Factor 5 is because I don’t think I’ll get assigned. The stock has not been doing much except move down.
This premium is a return of about a half a percent. It’s small but it gives me a little money to put toward my margin interest.
With Xpeng (XPEV) I bought 200 shares of the stock at $43.45 on 7/21/21. I just sold 2 8/13/21 $44 Call for a premium of 65¢ for $130.
Sell to Open 2 XPEV 8/13/21 $44.00 C @ 65¢ (+$130)
This trade get’s a Risk Factor 1.
This return is 1.5%.
Today I also made Master Trades with Square (SQ) and Advanced Micro Devices (AMD).
I own 300 shares of SQ at $263.50. Today I sold 3 SQ 8/13/21 $285.00 Calls for a premium of $5 for $1500. Sq is on the move!
Sell to Open 3 SQ 8/13/21 $285.00 C @ $5.00 (+$1500)
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With AMD I own 500 shares at $110 and 300 shares at $114.80.
Today I sold 5 AMD 8/13/21 $112 Calls for a premium of $3 for $1500 and I sold 3 AMD 8/13/21 $115 Call for a premium of $1.65 for $495. Both of these trades get a Risk Factor 1.
Sell to Open 5 AMD 8/13/21 $112.00 C @ $3.00 (+$1500)
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Sell to Open 3 AMD 9/13/21 $115.00 C @ $1.65 (+$495)
Successful trading,
Steve
The Options Coach