With Square (SQ) on a roll the last few weeks I just did a 5 contract Buy-Write. I bought 500 shares at $54.70 and sold a 5 contract $55 Call with an 80¢ premium for $400. This Call has only 2 more days until expiration. An 80¢ premium on a $54.70 stock is a 1.4% return on investment in just a few days. This trade is a Covered Call on a very hot stock so it gets a Risk Factor 1. I’m in this trade for the 80¢ premium and I hope to get assigned so I make another 30¢ on the stock sale. If I get assigned I’ll make a $1.10 on the 500 shares Buy-Write for a total profit of $550 on a 2 day trade.
Buy 500 Shares SQ @ $54.70
Sell to Open 5 SQ 3/16/18 $55.00 C @ 80¢ (+$400)
Steve
The Options Coach