You must go to the link GPRO Calls. This is a post I wrote on Jan 22, 2016 where I sold a Call on GPRO. I’ve been holding GPRO since I bought 2000 shares on Jan 5, 2016 for $19.89. On Jan 4th with the stock at $18.50 I sold 20 contracts of GPRO $20 Naked Calls with a Expiration Date 4 day away, 1/8/16. I brought in a premium of $520. On Jan 5th the stock had a big pop. The stock went up close to my Strike Price which forced me to cover my Naked Call by buying the stock at $19.89. I didn’t want to own the stock but I had a fear the stock was going well above my Strike Price. At this point I had a Covered call. As soon as I bought the 2000 shares at $19.89 the stocked reversed and started down. This is my biggest fear with Covered Calls. I really don’t like owning stock! In the next few days GPRO went all the way down to the $11 area. The option expired and I kept the entire premium but I was holding a stock much lower than where I bought. This shit happens and you have to deal with it. I could have sold the stock, take the loss, and move on, or hold the stock until it recovers. I didn’t want to sell at a big loss on 2000 share so I decided to hold the stock and sell Calls as I wait it out.
In the post I asked you to go to, GPRO Calls, I sold a Call and brought in an $1100 premium on 2000 shares of GPRO at $11.15. Thats a Rate of Return of 5% and it was a 3 month option. On Jan 22nd the premium was at $.55. With the time Decay the premium is down to $.02. Now that this option is just about to expire I just sold another Call. I sold 20 contracts of GPRO 7/15/16 $16 Call and a got $.70 premium for a total of $1400. This is another 6% I’m receiving for a 3 month option. I love this Rate of Return! This is a great way to bring in cash while I wait forGPRO to recover to my purchase price. With my original Call I sold, I received a premium of $520. Then the stock went down I sold the last Call for the $1100 and now today I sold another Call for $1400. So far as I wait for GPRO to recover I brought in $2500 in premiums. I’m turning GPRO into a money making machine. Where are you going to get this type of return? Not in a bank! I look at this a turning a bad situation into a good one. I hope it continues! I feel like I don’t even have to look at GPRO for the next 3 months and I’m making nice money. Without even blinking, this trade on a previously owned stock has a Risk Factor of 1 Here’s the order for today’s option sale:
Sell to Open 20 GPRO 7/15/16 $16 C @ $.70 (+$1400)
This has been a crazy busy Monday and I might not be done!
Steve
The Options Coach