I bought 1000 shares of Facebook (FB) on Monday 4/5 at $113, and sold a Covered Call that expired last Friday. That Call brought me a premium of $750. When the Call expired, I was not assigned and I put the premium cash in my mattress, and now my 1000 shares are available for another Call. Today I sold a Call, I sold 10 contracts of the FB $113 Calls and got a premium of $.50 for a total of $500. Last Friday the stock took a big dip, down $3. Today it started to recover so I sold the Call. Today as I write, the stock is up $2 and it’s at $111. This Call expires this Friday and the stock has $2 to go before I get assigned. I really don’t care if I get assigned or not. I think this is a nice trade for a quick $500. This is a Covered Call on a previously owned stock so I’ll give this Risk Factor of 1. Here’s the sell order:
Sell to Open 10 FB 4/15/16 $113 C @ $.50 (+$500)
If I get assigned I’ll be selling the stock for the same amount I bought. But with the 2 Calls I brought in $1250 in premiums ($750 & $500) in 2 weeks. Not bad! If I end up keeping my stock I’ll sell another Call next week.
Any questions, send me an email.
Steve
The Options Coach