This market continues to be extremely volatile. I’ve been making a lot of trades that don’t fit into my normal trade strategy. Many of them are buying Puts on my positions. I haven’t been reporting them because they are not part of my teaching with Main Street beats Wall Street. I’m hoping I’ll write a report on these trades once the market calms down. But all the trades will be reflexed in my account which will be part of my annual report.
Today I made a trade which fits into my normal trade strategy. I sold 10 Weight Watchers (WW) Calls. With the stock at $30 I sold a 3 day Call. I sold 10 WW 3/6/20 $31 Calls for a premium of 50¢ ($500). I was gonna sell the $30.50 Call but I don’t want to get assigned.
Sell to Open 10 WW 3/6/20 $31.00 C @ 50¢ (+$500)
I do not own the shares to deliver at $31. I own the stock at $39.40 so I don’t want to give these shares on assignment. If it looks like I’m gonna get assigned I’ll buy more shares to deliver at the lower price of $31. With this in mind this trade gets a Risk Factor 2. As I write the stock is up to $30.45. I might be buying the 1000 shares by the end of the day.
Successful Trading,
Steve
The Options Coach