While I was writing my last post, a few minutes ago, selling a Put on GPRO, I was executed on a 50 contract Call on Yelp (YELP). Yesterday I bought 5000 shares of YELP at $37.80. Today I just sold a Call against those shares. I sold 50 contracts of the $38 Call expiring this Friday and brought in a premium of $.40 ($2000). Yelp has been moving up recently and had a number of upgrades. I think this is a very safe trade and it can bring in some nice money. If the stock goes above the Strike Price of $38, I’ll get assigned. In this case I’d make $.20 on the stock for $1000 on 5000 shares plus the $2000 premium for a total of $3000. If it doesn’t get above $38, I keep the stock, which is hot right now, and I keep the $2000 premium. I really like this trade because yelp is hot and I don’t think it will drop too low. Anything can happen, but I feel good with Yelp right now. I give this trade, which is a Covered Call on a previously owned stock, a Risk Factor of 1. Here’s the Call sell order:
Sell to Open 50 YELP 8/19/16 $38 C @ $.40 (+$2000)
Steve
The Options Coach