I’m worried about this market! I’m worried about the prices of the new IPO’s! Some things are just not making sense to me. The only thing I can do is watch the TV, read reports, be near my computer, watch this market and make decisions based on what I’m comfortable with. Right now I’m not comfortable with owning a large amount of stock. I really hope I get assigned on every Covered Call I have going. I do not think our country and our economy are in a good place right now, and I want to be very careful. I’m having a great year and I don’t want to give my gains back in the last 3 weeks of the year. I’m willing to give some back for a small write-off, but not a large amount. I’d rather pay the taxes.
Having said that, I’m gonna be very careful with my trades for the remainder of the year.
I did just make a trade. Some might think it’s risky but I feel good with it. I’m in (2) 20 contract Covered Call with PLTR that will expire tomorrow. One is a $27 Call and the other a $29. I would like to, but I don’t think I’ll get assigned on the $29 Call. With this in mind I just sold another 20 contract Call with the Strike Price of $29. With the stock at $27.20 I sold 20 of the 12/11/20 $29 Calls for a premium of 50¢ for $1000.
Sell to Open 20 PLTR 12/11/20 $29.00 C @ 50¢ (+$1000)
Normally I would feel a lot of risk with this trade because this is a hot stock. However, because of my feelings about the market I’m not too worried about this Naked Call. I feel the market will pull back and all Calls for the remainder of the year might be Naked.
For me, and the year I’ve had, I don’t feel risk, and might even be able to use a small write-off lol. So, for me, this trade gets a Risk Factor 2. For others who might not have had such a great year this trade gets a Risk Factor 4. This is because it’s a Naked Call on a very hot, volatile stock.
If you’re trading, be very careful. If not, continue to learn and understand that market moves sometimes make no sense at all.
One more thing about the IPO’s. To me DASH at $180 is crazy! Restaurants are closing in large numbers and they have a lot of competition. Not to mention they never made money!
Airbnb is about to open. I’m sure this will also be at a very high price. I do like Airbnb better than DASH. They have a lot less competition, and I think with many losing their jobs, more people will be looking to rent their homes. I won’t be in either one unless I Short the stock. But the way some stocks move you never know where they’ll go.
Successful trading,
Steve
The Options Coach