What a crazy week! According to CNBC this was the worst one week in 4 years. I’m a little worried about going into the weekend owning a lot of stock the way the market has been moving. Here’s what I did. On this Monday 1/4/16 I bought 3000 shares of NFLX at $109. I sold the $112 Calls. The stock flew up to $120 during the week and it looked like I was going to be assigned and have my stock taken at the $112 Strike Price. In the last 2 days NFLX came all the way back down to below $112. If the stock stayed above $112 I would lose the stock. If it went below the $112 I would keep the stock. As you might know I like to lose the stock because I’m not into owning stock. I make my money trading options. Well, with 10 minutes left to the trading week the stock went down to the 111.25 area. I decided to sell the stock because I would not be getting assigned and I didn’t want the stock over the weekend. I bought for $109 and I just sold for $111.25. That’s a $2.25 profit. on 3000 shares that’s a profit of $6750. I Love It! Here’s the order to sell the stock:
Sell 3000 shares of NFLX @ $111.25
With the 3000 shares of stock I sold a Call Option on 1/6/16 and got a total premium of $3150. At the closing bell that option expired. That deal is OVER! I keep the entire premium of $3150.
In summation I bought 3000 shares of NFLX for $109 and sold for $111.25 for a 5 day profit of $6750. I sold a Call for $3150 and it expired so I keep the premium for a 3 day profit of $3150. I have other trades that expired today and I’ll include those results when I write a week ending post.
Total 1 week profit on the NFLX deal
$9900
“Money in the Mattress”
Pages to read to understand this trade:
Covered Call
Selling Options
Rate of Return
The Options Coach
Hey Coach,
The character of a true investor is one that boasts his wins but also divulges what he lost.
Nice going this year and looking forward to hearing more of your trades in the coming weeks ahead.
Yours truly,
Stock Coach