Morgan Stanley raised its price target on Tesla to $810. Also, the DOW, the NASDAQ and the S&P are in positive territory. The NASDAQ was down but just started up in the green. I decided to do a 3 day Covered Call with Tesla. I bought 100 shares at $757 and sold a 1 contract 1/8/21 $770 Call for a premium of $10 for $1000.
Buy 100 shares TSLA @ $757.00
Sell to Open 1 TSLA 1/8/21 $770.00 C @ $10.00 (+$1000)
This trade is on a very hot, high priced stock, and it is a Covered call, but there is some risk because the stock has a crazy valuation. I love Tesla and I bet on Elon Musk but this trade gets a Risk Factor 2 and not the normal 1 for a Covered call. The risk here is the risk of a drop with this presidential race that seems to never end. This causes uncertainty.
It looks like the Democrats are gonna win the 2 Senate seats in Georgia giving one party total control of the government. Me, I like the checks and balances system. This is very scary to me! I don’t like either party in total control. I think the “Squad” and the growing far left is gonna drive Biden nuts. Also, I think the Supreme Court will stay very busy for a few years. I’m a little worried about this country. They’re just different worries I had than when Trump was in. I just hope there are still people in congress that believe in the Constitution and what the framers had in mind for a republic. How the market handles all of this, along with the ongoing COVID problem, is still to be seen.
With all this in mind I hope to get assigned on this trade and move on.
Successful trading,
Steve
The Options Coach