This week was the closest to a normal week I’ve had since before my basketball coaching started. I had 4 trades come to an end this week and the weekly gain was very nice.
Since the end of the basketball season I’ve been growing my funds through trades and selling stocks I’m holding to increase my trading funds. I am not reporting all of my stock sales because I’m selling them out of another account. My trading account is a margin account while my account holding stock is not a margin account. Why pay margin interest on stocks I’m holding long term when I can hold them in a non-margin account?
As funds are growing in my trading account my trading volume will increases. This week is the first example of my trading volume increasing since basketball ended. Let’s take a look at what I did this week.
The first trade of the week was a Covered Call on Cree (CREE). I came into the week owning 500 shares of Cree from 3/20/19. On 3/20 I bought 500 shares and did a 5 contract Covered Call. That Call expired, I kept the premium and kept the stock. This week on 4/1 I sold another Call on those shares. This time the stock moved up above my Strike Price and I was assigned. When this happens I keep the premium and I sell the stock at the Strike Price. Below are the trades and the profit I made from the trades.
Cree Covered Call
3/20/19 – Buy 500 Shares CREE @ $57.70
4/5/19 – Assigned 500 Shares CREE @ $58.00
Profit +$150
4/1/19 – Sell to Open 5 CREE 4/5/19 $58.00 C @ 90¢ (+$450)
4/5/19 – Expired 5 CREE 4/5/19 $58.00 C
Profit +$450
When I did the Cree Covered Call I really felt the stock was gonna move. I still did the Covered Call because it’s my strategy and I try to stick to my strategy. However, I felt Cree was gonna move so in addition to my Covered Call I also bought an option. Most readers know buying options is not one of my main strategies. I decided to buy the option in the case the stock did move. With the Call sold I limited my upside to my $58 Strike Price. Owning the Call I would make some money if the stock went up. The stock did go up and I made an extra $500, but I would have made more if I hadn’t sold the Call. I sold the Call about an hour after I bought it. If I held the option until the end of the week I would have made at least another $1000. Buying options is a dangerous game. I made $500 on the option and I’m happy!
Buy Cree Option
4/1/19 – Buy to Open 5 CREE 5/17/19 $55.00 C @ $4.70 (-$2350.00)
4/1/19 – Sell to Close 5 CREE 5/17/19 $55.00 C @ $5.70 (+$2850.00)
Profit +$500
For my last trade of the week I did a Covered Call on Advanced Micro Devices (AMD). This was an At-the-Money Buy-Write Covered Call. I bought 800 shares of AMD at $29.50 and sold (8) 4/5/19 $29.50 Calls. I went into the trade with a Strike Price which was the same as my purchase price. I entered the trade for the premium only. It turns out the stock dropped 50¢ to $29 and I was not assigned. I keep my premium and I keep my stock. Late in the trading day on Friday I sold another Call on the stock. This Call will expire next Friday.
4/3/19 – Sell to Open 8 AMD 4/5/19 $29.50 C @ 60¢ (+$480)
4/5/19 – Expired 8 AMD 4/5/19 $29.50 C
Profit +$480
Total Weekly Gain +$1580
Like I said earlier, this looks like one of my normal trading weeks. Let’s hope I can keep it going and you can keep learning.
Have a great Weekend!
Steve
The Options Coach