Hi Readers! The market is just opening and I’m sitting in the airport going to Cancun. I’ll be on the island of Isla Mujeres for the next 4 days, than I move to the main land of Cancun to the Hard Rock Resort. I’ll be back to NYC next Wednesday. I have my laptop and I’ll be posting, as long as I have good wifi.
Yesterday I placed an order to sell 5 Calls on the 500 shares of Square (SQ) I’ve been holding. I placed the trade than had to leave my home because I had a lot to do with Fiore’s Pizza, my pizza joint, before I left. While I was away from the computer I was filled on my trade. Now, while sitting in the airport I finally have a minute to report the trade. I sold 5 contracts of the SQ 5/11/18 $55 Calls. I don’t think the stock will hit $55 by Friday so I entered the trade for a 50¢ premium for $250. I’m in the stock at $54.71so if I get assigned, no big deal! I give this trade a Risk Factor 1 because it’s a Covered Call on previously owned stock.
Sell to Open 5 SQ 5/11/18 $55.00 C @ 55¢ (+$250)
It’s not much of a premium because the stock was at $53 and I sold the $55 Call. I had to go to $55 because I’m in the stock at $54.71. If assigned I didn’t want to lose money on the stock. Another reason for the low premium is it’s only a 3 day Call. The stock has been down so now that it started moving I’m happy getting a premium. Even if it’s only $250! Let’s see what happens. I would like to not get assigned because SQ has been moving.
Gotta get my plane!
Steve
The Options Coach