I just bought 1000 shares of Advanced Micro Devices (AMD) to cover my Call.
You probably read that I sold a 10 contract Call on AMD on Friday. If you didn’t you can read about it hear, Sold 10 AMD Calls.
After reading that you can see I already own 1000 shares of AMD to make this a Covered Call. But, I don’t want to use those shares to cover this Call because I bought them at $30.95 and with this Call I used a Strike Price of $30. If I was assigned I would lose money (95¢) on the stock sale. I purposely left money available in my account in the case AMD started moving. I wanted to be able to buy another 1000 shares at a price lower than $30 so I won’t lose money on a stock assignment. Now, I’ll actually make money if assigned. I really wanted to leave this position without buying more stock in the hopes that the stock won’t hit $30.
Well, this morning AMD announced a new graphic product that they feel will be a big hit. This morning with the stock on the move I placed a “Stop Buy Order” at $29.35. I placed the order with the stock at $29.20, up about 25¢. I placed it at $29.35 because I didn’t want to buy the stock unless it was gonna continue moving up. The stock did continue up and when it hit $29.35 I was filled.
Buy 1000 Shares AMD @ $29.35
Now I hope AMD continues up for the week and I get assigned.
I also have an order in to sell a 10 contract Call on my shares of Dish Network (DISH). I was hoping I’d be filled so I could include the report in this email but as I’m writing I haven’t been filled yet. I’ll keep you informed.
Steve
The Options Coach