Earlier with NFLX at $93.95 I sold 10 contracts of NFLX $95.50 Naked Calls. On a down day the stock recovered from it’s low and is up to $94.75. With NFLX being a very volatile stock I decided to cover my Naked Call. I bought 1000 shares of NFLX at $94.75. When I sold the Call I put a Risk Factor of 5 on the trade but now that it’s a Covered Call I change the Risk Factor to 2. I didn’t change it to a 1 because of the volatility of the stock. The stock can easily go down and stay down for a while and put pressure on my account. Now that this is a Covered Call I’m hoping the stock goes up above my Strike Price and I get assigned. This should be an interesting week.
Steve
The Options Coach