I just returned home from bringing my wife to physical therapy. Two weeks ago she had surgery to repair a torn meniscus. I’ve been watching Amazon (AMZN) since their great earnings report. As I was walking out the door Amazon was moving fast. I hit the button on my computer to buy 100 shares with a market order. I was filled at $711.93. Amazon is probably the hottest stock right now. I’m back in my office and the stock is at $716.75. I did not buy the shares to just hold them, I bought them to sell a Call against them. As I’m writing this post to report the purchase of the stock I put in an order to sell 1 contract of the $717.50 Calls expiring this Friday. I’m trying to get a $7 premium. If I get executed I’ll get a premium of $700 for a 2 day option. I like this deal! If I get executed on the Call Option and get assigned on Friday it will be a nice 2 day profit; a little over $1250. Lets see how it plays out. Here’s the buy order for the 100 shared:
Buy 100 shares of Amzn @ $711.93
I know the size of this order looks a little different than my other orders, but this is a stock selling for over $700 per share. At $711.93, thats $71,193 to fill that order. As I always preach, it’s not about the amount of contracts, it’s about the Rate of Return. I’m hoping to get out of this deal this Friday with a return in the area of 2%.
The stock is running as I write. I might change my option order to a higher Strike Price. I’ll let you know how this works out.
Steve
The Options Coach