This was another great week! (All details below). I say “another great week” because last week I pocketed $8500. I know I can’t do this every week, but if I could it would be close to a half million bucks a year. Not a bad goal to have. At least not a bad dream to have. Well, I dream big!
I changed the page Trade History a little. I always listed all my Trades and Trade Results, and now I added Weekly Gain. I did this because I send out a post of my weekly results, so I might as well list my weekly results (as weekly gain) on my Trade History page. This Weekly Gain can be listed as a (-) number, it just didn’t happen yet this year. Also remember, everything listed on my Trade History page are trades completed. Meaning, I entered the trade and I exited the trade. The deal is over, and I listed the results of the trade. A trade I didn’t exit yet will not be listed in Trade History until I exit the trade.
Let’s get on to this weeks results. This week was pretty busy! I sold 4 Call options; 1 Covered Call and 3 Naked Calls but as the week went on I covered some of the Naked Calls by buying the stock. I’ll go over each trade and the results.
NFLX Covered Call
I started the week with a Covered Call on Netflix (NFLX). This Call was against shares I previously owned. The post I wrote on the sale of this option is called Executed on NFLX Calls. On 3/7 I bought 1000 shares of NFLX for $97.95 and on 3/28 I sold a Covered Call. I sold 10 contracts of the 4/1/16 $101 Covered Call and received a premium of $1.15 totaling $1150. Yesterday 4/1, was Expiration Day and the stocked closed at $105.70. I had to sell my stock for $101 and I made $3.05 on the sale ($3050 on 1000 shares), but if I never sold the Call Option I would have sold the stock for $105.70 for a profit of $7.75 ($7750 on 1000 shares). This is called an Opportunity Lost. I had a lost opportunity because I sold the Call Option. If I didn’t, instead of profiting $3050 on the sale of the stock I could have profited $7750. This is part of the game! If you cannot handle it, and I understand it’s tough to handle, Do not sell Call Options. I am in the “premium” game. I make my money selling options for the premium. In this case I could have made more money, but I guess looking back at situations where both are making money is a good problem. Let me tell you one thing, the traders that are only buying stock and not selling options are not doing as well as I’m doing. Make sure you understand Opportunity Lost. Let’s get back to the trade. So I made $3050 on the stock because I was assigned. My stock was bought by the Call buyer at the Strike Price. In addition to this deal I keep the premium of $1150 which lessens the blow of the Opportunity Lost. The total gain of the Covered Call including the stock sale of $3050 + $1150 (premium) totaling $4200. When it come to Opportunity Lost, Don’t cry for me Argentina!
Total Profit +$4200
U.S. Steel Naked Call
Also on Monday I sold a Naked Call on U.S. Steel, the post is called U.S. Steel Naked Calls. I sold 50 contracts of the 4/1/16 $16.50 Naked Calls and received a premium of $.30 totaling $1500. Everything was going great until Thursday the 31st when the stock was getting close to the Strike Price. I ended up buying the stock just under the Strike Price, 5000 shares for $16.45. See the post Covered My U.S. Steel Calls. At this point I went from a Naked Call to a Covered Call. About 2 minutes before the close yesterday, Expiration Day, I sold the 5000 shares for the same price I bought, $16.45. It looked like it was going to close below the Strike Price and I didn’t want to hold the stock over the weekend, so I sold. About 10 seconds before the close the stock moved up to $16.55. I have to deliver the stock at $16.50. If the stock stayed at $16.45 it would have not been a problem but since it moved above the $16.50 I might have to deliver the stock which I do not own because I sold. At this point I do not know what’s going to happen because the “powers that be” have until later on today to settle up all the contracts. I will be writing a post and a lesson on this trade on Monday. For beginners I know it might be getting complicated but don’t get discouraged or intimidated. There’s a lot of money to be made so keep studying….So I didn’t make any money on the stock trade because I sold for the same price I bought. But the option expired so I keep the premium, which is what I went into the Naked Call for in the first place. The premium was $1500. I’ll take it, Thank you!
Total Profit +$1500
Time Warner Naked Calls
Again on Monday I sold another Naked Call. This one was 20 contracts of Time Warner 4/1/16 $74 Naked Calls and received a premium of $.45 totaling $900. See the post Time Warner Naked Calls. This was an uncomplicated trade. When I sold the Call the stock was at $72.60 and I had a Strike Price of $74, the stock never got close. Yesterday the option expired and the deal is over and I keep the $900 premium. It’s nice when it’s this simple!
Total Profit +$900
NFLX Naked Calls
On Wednesday the 30th NFLX went up to $104. I felt it was going to pull back so I sold 5 contracts of the NFLX 4/1/16 $104 Naked Calls and received a premium of $1.45 for a total of $725. See the post More NFLX Naked Calls. This worked out great because NFLX did pull back. It dropped down to the $102 area. But, when selling options there’s always a BUT! On Friday a good employment report came out along with a good manufacturing report and the market went up after a down opening. NFLX moved up fast! Lucky for me I was able to buy 500 shares to cover my Call before it went above my Strike Price of $104. I got in at $103.45. See the post Buy 500 shares NFLX. This worked out great because the stock went up to $105.70 and I had the Calls covered. At the end of this deal I was assigned and made $.55 on the 500 shares for a profit of $275, plus the option expired so I keep the premium of $725. The total gain on this trade is $1000.
Total Profit +$1000
As you see this was a wild week and a very good week. For beginners there’s a lot to learn from these trades. Keep studying! Keep following “Main Street beats Wall Street” and don’t get intimidated. There is a lot of money to be made. If you have any questions please email me. I will be your mentor!
Total Weekly Profit +$7600
Yes I do put in the time but I love this game. The way I look at it, there is plenty of people getting up, commuting a long way and sitting in an office 8 to 10 hours a day. I’m rather sit at home in my pajamas! For you younger readers, I’m joking a bit. This is no replacement for a good job with benefits. You must have a job and study this stuff for when you do have more time and money to invest. For you older readers, if you’re not getting into this you are missing out on a lot of money. Retirement can be better!
Steve
The Options Coach