I just made a trade with Apple (AAPL).
After getting out of a few position last week I had a large margin account to invest with this week. About 20 minutes ago I bought 200 shares of AAPL to do a Covered Call with. I was looking for a safe trade and AAPL is the hottest stock right now.
Like I said, 20 minutes ago I bought 200 shares of AAPL at $313.65. I put is a trade offer for 2 contracts of the 1/17/20 $317.50 Calls for a premium of $2.50 and I was waiting to get filled. From my buy price of $313.65, the stock went up to $314.95 and I got filled.
Buy 200 Shares AAPL @ $313.65
Sell to Open 2 AAPL 1/17/20 $317.50 C @ $2.50 (+$500)
AAPL has been receiving upgrades everyday. The last was with a target price of $375. Even if I don’t get assigned I’m OK with owning the shares. This is a Covered Call on a crazy hot stock so I don’t feel any risk at all. The trade gets a Risk Factor 1.
Back on 9/16/19 I bought 10 DISH $35 Calls to expire on June 19th. The stock is up 65¢ today but the stock is not moving the way I predicted in the beginning. When I bought the $35 Call the stock was at $36. The stock is at $36 today. The Time Decay is gonna start hurting me. Even though the stock is at the same price as when I bought the Call the premium is down about $2 because of time passing by. It is so important to understand Time Decay if you want to be an options trader. Because I understand this concept I started to bail out of this position. Today I sold 2 of my 10 Calls. I’ll start cutting my loses and hold part of the position in the case the stock continues up. In the order forms below I’ll list buying 2 contracts and selling 2 contracts. The remaining 8 contracts will remain on my “Active Trades” page.
9/16/19 – ($36.00) Buy to Open 2 DISH 6/19/20 $35.00 C @ $6.30
1/13/20 – Sell to Close 2 DISH 6/19/20 $35.00 C @ $4.40
Loss -$380
I would love for DISH to start moving. I’ll watch it closely. If it doesn’t I’ll be selling more very soon.
As I’m writing about DISH, Apple continues moving up!
Successful trading,
Steve
The Options Coach