Last week on 11/30 I bought 1000 shares of Nikola (NKLA) at $20.60 and sold a 10 contract Call. Buying the stock at $20.60 and selling the $21 Call gave me a premium of $2.05 for $2050. That’s a crazy premium for a low priced stock with a 1 week option.
The stock pulled back a few dollars but today it’s up 80¢. The stock is at $19.10. At the open, with the $21 premium at 20¢ I placed an order to sell 10 Calls to expire this Friday with the premium of 30¢. I was just filled. I know last week’s premium was much bigger but I still like taking in $300 for a 4 day trade.
Sell to Open 10 NKLA 12/11/20 $21.00 C @ 30¢ (+$300)
Even though it’s a smaller premium than last week this premium is still a 1.5% return on my investment. This trade gets a Risk Factor 1.
Successful trading,
Steve
The Options Coach