Covered Calls with NEP and PLTR
Hi Main Street beats Wall Street, I have been involved in a few things in my life that have been dominating my time. But rest assured, I am still trading and studying the market. I have been making trades but haven’t had time to do my writing, however, I found time today.
Yesterday I did a Covered Call with Nextera Energy Partners (NEP). NEP is one of my high dividend stocks I hold so I decided to buy another 100 shares to do a Covered Call. I figured If I get called away I would make a little on the stock and keep the premium. And If I don’t get assigned I’ll keep the stock for the dividend. The stock came down a little after the last earnings and the dividend is up to 19%. The stock was just approved for its next dividend, which will come Nov 14th. We will have to watch closely after that because with the stock down and the dividend so high I think it will be cutting its dividend. Even if it was cut by 50% it would still be a good dividend.
10/29/24 – Buy 100 Shares NEP @ $ 19.90
10/29/24 – Sell to Open 1 NEP 11/1/24 $20.00 C @ 50¢ (+$50)
This is not a big money trade but I always look at my Return on Investment (ROI). This premium is a 2.5% return for a 4 day trade.
As I was about to send this trade notice I was just executed on another trade so I added it to this notice. I love the company Palantir (PLTR). The stock has been moving nicely for a while now. Their earnings will be reported this coming Monday, Nov 4th. I normally don’t get involved in a stock with earnings coming, or any other big news, but I decided to take a shot with 100 shares. I do not advise anyone to go against the rule of trading a stock with news imminent. This is a case of “do as I say, not as I do!” I bought 100 shares of PLTR at $44.53 and sold a $46 Call. I guess I was sucked in by the big premium. But I would not mind keeping the stock long term so I went against my rule.
Buy 100 Shares PLTR @ $44.53
Sell to Open 1 PLTR 11/8/24 $46.00 C @ $2.50 (+$250)
This premium is a 5.6% return on a 1 week trade. If I don’t get assigned I keep the stock and keep the $250 premium. If I do get assigned I make $147 on the stock sale and keep the $250 for a total return of $397. This would be a Return on Investment (ROI) of 8.9% for the 1 week trade.
I’m thinking of starting a class on option’s trading. It would be held at a local VFW post here on Staten Island. It would be free or have a small fee (a few bucks) to give to the post. The class would be limited to about 15 people. It would probably be held on Tuesday or Wednesday evening for 1 to 2 hours. If you might be interested or have any questions please let me know.
Successful trading,
Steve
The Options Coach