Results Week Ending 2/3/23

I am very nervous about the Stock market and I’m being very careful. I doubt if I ever get back to trading the way I was. I’m at a different point in my life and have different priorities. I cannot see myself sitting in front of a computer 8 hours a day any more. Especially after the beating my account took the last 2 years. I still have the knowledge and the knowhow in addition to the lessons I’ve learned the last 2 years. The big lesson I’ve learned is the ramifications of working on margin. There are a few problems with working on margin. The first is, when your stock goes down you lose a lot more money because you are leveraged. It’s not that I didn’t know this, but for many years I did very well on margin and the crash of the last 2 years came on very fast. I guess I was spoiled and felt I could do no wrong. Another problem is, to be an options trader you can only do certain strategies if you work on margin.  If you are going to work on margin I suggest you work with 2 accounts; one margin and the other non margin. Do most of your workin the non margin account and use the margin account for the few trades where you want to work on margin or have to work on margin.

I made 2 trades this week. Besides the longer term investments I made in my dividend stocks these are the first 2 trades of the year. They were options trades using Covered Calls. And I used Medical Properties Trust, Inc. (MPW) which is one of the stocks I bought for the dividend. Most readers know I like to get assigned with my Covered Calls. With MPW, If I don’t get assigned at least I’m holding a high dividend stock. At today’s price the stock is paying a dividend of 9 to 10%.

On 1/27/23 I bought 500 shares at $12.48 and sold a 2/3/23 5 contract Call for a premium of 25¢. This is a return of 2%. Then on 1/31/23 I bought another 500 shares at $12.74 and sold a 5 contract Call for a premium of 17¢. This is a return of 1.3%. While the stock shot up to $13.55 it backed down to below $13 and I was not assigned. I should get another Call sold on these 1000 shares on Monday. I’m getting back to basics.

 

1/27/23 – Sell to Open 5 MPW 2/3/23 $13.00C @ 25¢ (+$125)

2/3/23 – Expired 5 MPW 2/3/23 $13.00 C 

Profit +$125


1/31/23 – Sell to Open 5 MPW 2/3/23 $13.00 C @ 17¢ (+85)

2/3/23 – Expired 5 MPW 2/3/23 $13.00 C 

 Profit +$85


Total Weekly Gain $210 


Not only back to basics but back to Slow and Steady, Steady and Slow!

Good luck! Any question send me an email.

 

Successful trading,

Steve

The Options Coach