I just sold a 10 contract AMD Call to continue my Roll-Out position.
It has been a crazy busy weekend! The last post I wrote was very close to the closing bell on Friday. That post was New Stock Added to a Wealth Builder Portfolio. The last sentence of that post was: I just made a move with AMD. I don’t have time to write about it now because it’s my wife’s birthday and we’re on our way out the door.
Anyone following Main Street beats Wall Street knows Advanced Micro Devices (AMD) has been a thorn in my side. Not because the stock isn’t moving nicely, but because it’s moving against my prediction. My prediction was for AMD to back off a bit. This goes back to the first week of November when I sold a 10 contract Naked Call on the stock. The stock moved up then, and it continues to move up today. For whatever reason the stock continues to run, the bottom line is my prognosis was dead wrong.
When the stock continued to move up I was doing Roll-Outs to show the readers that you can make a losing trade a winner with this strategy. And the truth is you can continue to Roll-Out until it does become a profitable trade.
On Friday I decided to take this bull by the horns and start making money with this crazy hot stock. With the stock at $41.45 I bought 1000 shares of the stock to cover my Roll-Out; plus I did a Buy to Close on my last AMD Call because it was expiring at the close. To continue the Roll-Out, I placed an order to sell another Call to expire in February.
Buy 1000 Shares AMD @ $41.45
I was filled on the buying of the stock and the Buy to Close order but I was not filled on the selling of the Roll-Out Call.
This morning I re-placed the Sell to Open order to complete the Roll-Out. I was just filled on that order.
Sell to Open 10 AMD 2/21/20 $43.00 C @ $3.35 (+$3350)
This Roll-Out is going on too long so this will be my last one. At this expiration I’ll either take the loss of I’ll have the Call covered. As of right now it’s covered but I plan on selling Calls against these shares. In fact, as I write I was just filled on a Call against the shares I own lol. Live trading as I write lol.
This Roll-Out is going too long because the stock keeps moving up, but on February 21st it will end. With a lose or a gain, I’ll move on.
For the readers who are not following this position, I know it’s getting confusing but I must report what I’m doing. Below is the entire Roll-Out.
11/11/19 – Sell to Open 10 AMD 11/11/19 $36.50 C @ 51¢ (+$510)
11/15/19 – Buy to Close 10 AMD 11/1/19 $39.50 C @ $2.05 (-$2050)
11/15/19 – Sell to Open 10 AMD 12/13/19 $37.50 C @ $2.20 (+$2200)
12/13/19 – Buy to Close 10 AMD 12/13/19 $37.50 C @ $4.05 (-$4050)
12/16/19 – Sell to Open 10 AMD 2/21/20 $43.00 C @ $3.35 (+3350)
At this point I’m down $40 (add the dollar amounts in parentheses) . This is not bad considering how this stock moved with me owning Naked Calls. The Roll-Out prevented me from losing a lot of money. However, I could have ended the position on 11/15 with just a $1540 loss, and moved on. O Well, I hope we learned something.
This post was to report that I bought 1000 shares of AMD at $41.45. While I was writing I placed an order to sell a $43 Call to expire this Friday. Back to normal trades lol. Also as I was writing I was filled on that Call.
Sell to Open 10 AMD 12/20/19 $43.00 C @ 60¢ (+$600)
This is a Covered Call on a very hot stock so the trade gets a Risk Factor 1.
I hope everyone is following the Wealth Builder and it’s 3 portfolios. The last stock add was Marvel (MRVL). It was added to the 5 Star Trading Portfolio. I’m looking for the time to write the report on the stock. I think it will be a good one. Not sure if it’s ready to move yet, but once 5G kicks in I think MRVL will be a big player. 2020 will be a big year for 5G stocks!
Week ending report coming soon.
Successful Trading,
Steve
The Options Coach