I have a lot to talk about when it comes to GoPro (GPRO). If you are a Grasshopper, maybe it’s better you don’t even read this post. It’s very confusing! Maybe it’s better to look at my Active Trades and see what I have alive. I’m sorry for the complication but I must post what I’m trading. I would rather a beginner skip this post because I don’t want to discourage you.
The first thing is on Monday the 11th I sold 20 Naked contracts of GPRO to expire today. As I was watching this Naked Call closely today I realized I never logged the trade in my Active Trades. Not only did I not log the trade but I didn’t even blog when I made the trade. I don’t know why this happened but my only explanation is, I’ve been trying to get work done around the house this week moving my office from an extra bedroom to the finished part of the basement. I’ve been very busy and I guess while I was working I forgot to log this executed GPRO trade. I apologize!
The trade I made Monday was 20 Naked contracts of GPRO $12 Calls expiring today. The premium I received was $.32 ($640). I was watching this position very closely because I sold the Call In-the-Money and the stock has been above $12 since I sold. Today with about 2 hours left to the close the stock dropped below $12 and it closed at $11.90. This Call will expire and I keep the $640. Here’s the order for the Call I sold on Monday:
Sell to Open 20 GPRO 7/15/16 $12 C @ $.32 (+$640)
When the Call above was moving below and above the Strike Price of $12 I decided to buy 1000 shares of GPRO to cover the Call just in case is closed above $12. I bought these shares at $11.90. I was hoping the stock would go back up above $12, I’d make $.10 on the stock and get assigned at $12. Keep the premium of $640 and the stock gain of $.10 ($200). When the market was getting close to closing I realized the stock was not going to go above the $12 so I decided to sell another $12 Covered Call for next week. I sold 20 GPRO 7/22/16 $12 Calls @ $.32 for another $640. Here’s the order I entered near the close:
Sell to Open 20 GPRO 7/22/16 $12 C @ $.32 (+$640)
For you readers who follow Main Street beats Wall Street closely you know I own 2000 shares of GPRO I bought in January to cover a Naked Call. I’ve been selling Calls on these shares since January bringing in premiums. The problem is I bought these shares at $19.89 and the stock dropped way down. The stock has been hanging around the $10 and $11 area. I don’t want to sell the stock at a big loss.
With the market near the close and GPRO at $11.90, I decided to stop goofing around with GPRO on a weekly basis. Owning the 2000 shares at $19.89 and now 1000 shares at $11.90, I decided to average down my price for the stock and buy another 2000 shares at $11.90. I now own 5000 shares at an average price of $15.09. With this I sold a LEAP which will expire in January, 2017. Earlier in the week I wrote a blog on LEAPS when I sold a LEAP on U.S. Steel. With GPRO I sold 50 contracts of the 1/20/17 $15 Calls and brought in a premium of $1.03 ($5150). Here’s the order for the stock”
Buy 3000 shares GPRO @ $11.90
Here’s the order to sell the 50 contracts against the 5000 shares I now own:
Sell to Open 50 GPRO 1/22/16 $15 C @ $1.03 (+$ 5150)
Complicated enough yet? Well I’m not done! I did have a Call on my 2000 shares I owned since January. It’s about the 5th Call I sold on these shares. Well, I had a $11 Call expiring today. I didn’t want these shares to get assigned so I Rolled them out to be part of my 50 contract LEAP.
Now I have 70 contracts of GPRO. 50 are covered. 20 contracts expire next Friday.
I’m very sorry for the confusing post but this is the type of trades you make when a Covered Call stock goes down and you’re bent on not losing money.
Have a nice weekend!
Steve
The Options Coach.