I just bought another 1000 shares of Weight Watchers (WW) at $36.75 and sold a $37 Call.
I like WW this week. The stock is in an uptrend and I think it will continue for a few weeks. WW will report earnings on Thursday, 2/25. They received an upgrade by Goldman Sachs reporting an uptick in subscriptions. I don’t know how their earnings will be but I think WW will give good guidance.
I already own 1000 shares of WW at $39.40. I’m still trying to get a Call sold on these shares. I really don’t want to own another 1000 shares of WW but I think this is a good opportunity. Buying the additional 1000 shares at $36.75 and receiving a 95¢ premium, I’m hoping, will give me a gain of $250 on assignment plus the $950 premium. The premium alone is a return of 2.5%. If this works out I’ll make $1200 on this 5 day deal. I like it!
Weight Watchers Buy-Write
Buy 1000 Shares WW @ $36.70
Sell to Open 10 WW 2/14/20 $37.00 C @ 95¢ (+$950)
This is a great example of how volatility effects premiums. I hope to get a Call sold on my other 1000 shares of WW this week.
The only thing that has me worrying is the coronavirus. Let’s hope they can get it under control.
Successful trading,
Steve
The Options Coach