Week Ending 3/15/24
My last 2 weeks I had some nice results but this was not a good week for taking profits. I’m in a bunch of positions but didn’t have the opportunity I wanted to get out of them. Last week was not a very good week for the tech stocks, at least not the ones I’m in. Most of the positions I’m in are Long Options and they don’t expire until June so I have some time.
I bought a few Bull Call Spreads that expired at the end of the week of 3/15 but the week didn’t end the way I wanted. I’m still working on this strategy and figuring out which Strike Prices and Expiration Dates to use. I will explain a little more with each position below.
Block
Bull Call Spread
2/26/24 – Buy 2 SQ 3/15/24 $76.00 C @ $3.15
2/26/24 – Sell 2 SQ 3/15/24 $78.00 C @ $2.35
Net Cost = ($0.80) per Contract
SQ Closed Above the $78 Strike for Maximum Profit
Profit $240
This Bull Call Spread with Block (SQ) worked out well. I went into the position on 2/26 and the Expiration was 3/15. This is over 2 weeks. Remember to get maximum profit the stock has to close on Expiration Day above the higher Strike Price, the Strike of the Short Call. SQ closed above the $78 Strike so I received the maximum profit. The profit was $240. For the 2 contracts the cost of the position was $160 (80¢ per contract X 200). On the $160 investment I made $240. That’s a Return on Investment of 150%.
Micron
Bull Call Spread
3/8/24 – Buy 2 MU 3/15/24 $100.00 C @ $2.25
3/8/24 – Sell 2 MU 3/15/24 $103.00 C @ $1.25
Net Cost = ($1.00) per Contract
MU Closed Below the $100 Strike
Loss -$200
With this Micron (MU) Bull Call Spread I entered on 3/8 and it expired on 3/15. That’s only 1 week. The stock pulled back and the 1 week was not enough time for it to recover. The result is the stock closed below the lower Strike Price, the Long Call, and the position expired at a total loss. I invested $200 and I lost $200.
Block
Bull Call Spread
3/11/24 – Buy 2 SQ 3/15/24 $81.00 C @ $2.45
3/11/24 – Sell 2 SQ 3/15/24 $83.00 C @ $2.50
Net Cost = ($0.90) per Contract
SQ Closed Below $81 Strike
Loss -$180
Here is another with Block (SQ). I entered on 3/11 and the position expired on 3/15. That is only 4 days. If you do a Bull Call Spread with only 4 days to expiration that stock better move immediately. In this case the stock didn’t. The stock pulled back to be below the lower Strike Price and this position was another loss. The Net Cost of the position was $180 and I lost $180.
I am learning which Strike Prices and Expiration Dates I like but the bottom line is you have to pick stocks that will move as soon as you get in. For my next positions I will look closer at the charts and hopefully I can make better decisions on which stocks to use for my Bull Call Spreads. However, as you can see, you can make some nice returns if you pick the correct stocks.
Total Weekly Loss -$140
Sorry for the late report.
Any questions send an email.
Successful trading,
Steve
The Options Coach