Yesterday I sold 10 contracts of Micron (MU) Naked Calls. I felt the stock was going to take a break from a big move it’s been on. When I sold the Call the stock was at $50.80 and I sold the $52.50 Calls. When I sold the Call I also placed a “buy-stop” order at $52.25. This “buy-stop” order was to automatically buy 1000 shares if the stock got up to the buy price of $52.25. Late in the day yesterday, the stock continued to move crazy, and the stock hit my buy price and I was filled. I now have a 10 contract Covered Call.
3/5/18 – Buy 1000 Shares MU @ $52.25
I’m very happy that I placed the “buy-stop” order because the stock is continuing to fly this morning. However, I’d be happier if I bought the stock and didn’t sell the Call lol. When I sold the Call it was naked and I gave it a Risk Factor 5. Now that I’m covered and the stock is well above my Strike Price the Covered Call has a Risk Factor 1.
The market has been moving again! I’m thinking Wall Street is starting to like Trump’s trade policy moves.
If you have a question on a “buy-stop” order send me an email.
Steve
The Options Coach