Hello “Main Street beats Wall Street” readers. I am home and back at my desk. I had a great time at Daytona Bike Week! I spent 5 days in Daytona then went down to Ft. Lauderdale for a few days. I always love going to Lauderdale. I had a place for 11 years and it’s great seeing old friends. Daytona was fun because I spent the 5 days with some old FDNY buddies and met a few more people who are now friends. The weather was nice and had a fantastic time on the motorcycle.
Yesterday while I was traveling I tried to do a Buy-Write with NFLX. Not too often do I do a Buy-Write where I buy the stock and sell a Call on one order. I would normally buy the stock, then sell a Call when I get the premium I desire. For all intents and purposes when I buy a stock and write a Call on a different order I’ll still call it a Buy-Write. Make sure you hit the link and read up on what a Buy-Write is. When you hit the link it will bring you to the page on Covered Calls. Scroll down and you’ll see Buy-Write, but you should read the entire page on Covered Calls….So yesterday I put in the order to buy the stock and it was executed. Then I put in the order to see a Call but it was never executed. While I was trying to sell the Call and traveling I never got to post the buying of the stock. Here’s the order to buy the stock:
Buy 1000 shares NFLX @ $97.95
If you follow Main Street beats Wall Street you know I already own NFLX. I put those shares on the back burner until they return to where I bought them. I bought all those shares between $115 and $119. I do not want to sell Calls on them until the stock price gets higher. I don’t want to take a chance on being assigned. I actually transferred them to a different account so they don’t get in my way. I have faith they will return to the higher price.
With these shares I bought yesterday I just got executed selling a Call. I sold 10 contracts of the 3/11/16 $101 Calls and received a premium of $1. On the 10 contracts, thats $1000. This is a Covered Call so I give it a Risk Factor of 1. I’m hoping NFLX goes above 101 by this Friday and I get assigned. If that happens I’ll make $3.05 ($3050) on the stock, plus the premium of $1000 for a total of $4050. I think it would be a nice deal. Let’s see what happens. Here’s the order to sell the Call:
Sell to Open 10 NFLX 3/11/16 $101 C @ $1 (+$1000)
While in Florida a few more readers signed up to received my email whenever I make a post. I would like to welcome you to “Main Street beats Wall Street” and thank you for joining us. I hope some day I can help you make some money. Do your homework and always remember education, education, education, plus a lot of discipline adds up to being successful. As you do your studying, if you have any question please email me at Coachsjc@gmail.com. Also do not start trading without contacting me!
To understand this trade above make sure you go to the links below:
Steve
The Options Coach