Last week I did a “Buy-Write” with Advanced Micro Devices (AMD). I bought 2000 shares at $11.98 and sold an At-the-Money $12 Call. The stock dropped a little and my Call expired so I kept the 25¢ premium. On the 20 contracts the total premium was $500. On Friday the stock closed below my Strike Price so I still own the 2000 shares. Today, a few minutes ago I sold another 20 contract Call to expire this Friday. I sold 20 contracts of the AMD 6/23/17 $12 Call and received a premium of 30¢ for $600. Let’s watch and see if I get assigned this week. When I sold the Call the stock was at $12 and as I write it’s down to $11.80. This trade is a Covered Call on previously own stock so it gets a Risk Factor 1. Here’s the order:
Sell to Open 20 AMD 6/23/17 $12 C @ 30¢ (+$600)
This trade gave me a 30¢ premium on a $12 stock. The Rate of Return is 2.5% for a 5 day investment with a very good stock. I like this deal!
I’m looking at a few more possible trades to do this week. If I don’t make one of these trades I might turn this Covered Call into a “Triple Play Hedge.”
Steve
The Options Coach