On 12/24/20 I bought 1000 shares of Snap (SNAP) at $52 and sold a $56 Call. When I made this trade I pushed my Expiration Date out to 1/8/21 because I had such a great 2020 I wanted all future gains to go into 2021 for tax purposes. Because I went out a few weeks I went a little higher on my Strike Price. I went with a $56 Call when I normally would have gone with $53 or $54 for a 1 week trade.
The stock was up to $53 today but this Call expires tomorrow and I don’t think it will get to my Strike Price of $56. With this in mind I just sold another Call against these shares. I sold 10 contracts of the 1/15/21 $54 Calls for a premium of $1 for $1000.
Sell to Open 10 SNAP 1/15/21 $54.00 C @ $1.00 (+$1000)
At the moment this Call is Naked. Once my Call expires tomorrow this new Call will be covered. Until tomorrow this is a Risk Factor 5. After the close tomorrow, if I don’t get assigned on the 1st Covered Call, this will become a Risk Factor 1.
Successful trading,
Steve
The Options Coach