I’ve been in Gopro (GPRO) for a while now. I bought 10,000 shares in September expecting the stock to do well for the holiday season. The company is having very big production problems which is going to affect their bottom line. And these production problems were evident in their 3rd quarter earnings results which were announced yesterday. Today the stock is down $1.60 but doing better than I excepted. Yesterday at the close I sold a 100 contract Call on my shares as a little insurance because I felt the report was not going to be good. I sold 100 contracts of the 1/20/17 $17 Calls and received a premium of $.30 ($3000). Today at the open the stock was down $2 and I took advantage of the fall in the premium. I bought back the Call for $.10 for a $2000 profit. My stock is still down but with this 1 day Call deal I put $2000 in my mattress. Here’s the sell and buy orders:
Sell to Open 100 GPRO 1/20/17 $17 C @ $.30 (+$3000)
Buy to Close 100 GPRO 1/20/17 $17 C @ $.10 (-$1000)
Profit +$2000
The situation I’m in with GPRO is not a good one! As I mention many times in Main Street beats Wall Street, trading options is not always a smooth highway. You will run into many road hazards and you must learn to negotiate around problems with adjustment trades. I might be in this position for a while but I believe I will end up a winner. If I have to sell LEAPS on my shares and settle for a 10% Rate of Return, I will! Imagine “settling” for a 10% return! Some people would die for that. Stay tuned and watch how I handle this position.
Steve
The Options Coach