Sold a 2 Contract Call with SQ

Back on May 6th I bought 200 shares of Block (SQ), (formally called Square) at $71.20 per share. At the time I bought the shares specifically to sell a Call option. And I’ve been selling Calls ever since because I never got assigned. Today I sold my 12th Call option on the same 200 shares of SQ. With the stock at $72.77 I sold 2 11/8/24 $75 Calls for a premium of $3. This gave me a total premium of $600 for the 200 shares.

Sell to Open 2 SQ 11/8/24 $75.00 C @ $3.00 C (+$600)

As you see I gave this trade a Risk Factor 1 because I previously owned the shares and I really don’t care if I get assigned or not. Normally this would not be a great time to sell an option; #1 we have the election tomorrow, and #2, SQ reports earnings this Thursday. These are two huge news items which can move the market and the stock a lot. But, like I said, I already own the stock and I don’t care if I get assigned.

These two news items are the reason for the inflated premium. With my buy-in price for the stock at $71.20 getting a $3 premium is a nice 4.2% for the one week trade. If I get assigned at $75 my profit on the stock will be an additional $3.80 per share for $760 on the 200 shares.

Below I listed all the trades I made selling Calls on these same 200 shares and the return percentage. All the trades were with a one week Expiration Date.

5/6/24 – Sell to Open 2 SQ 5/10/24 $73.00 C @ $1.00 (+$200)

Return 1.4%

5/15/24 – Sell to Open 2 SQ 5/17/24 $73.00 C @ $1.50 (+$300)

Return 2.1%

5/17/24 – Sell to Open 2 SQ 5/24/24 $73.00 C @ $1.30 (+$260)

Return 1.8%

6/28/24 – Sell to Open 2 SQ 7/26/24 $71.00 C @ 80¢ (+$160)

Return 1.1%

7/5/24 – Sell to Open 2 SQ 8/2/24 $73.00 C @ $1.50 (+$300)

Return 2.1%

8/29/24 – Sell to Open 2 SQ 9/27/24 $74.00 C @ $1.40 (+$280)

Return 1.9%

9/5/24 – Sell to Open 2 SQ 10/4/24 $73.00 C @ 75¢ (+$150)

Return 1%

9/12/24 – Sell to Open 2 SQ 10/11/24 $72.00 C @ 65¢ (+$130)

Return 0.9%

9/26/24 – Sell to Open 2 SQ 10/25/24 $73.00 C @ 70¢ (+$140)

Return 0.9%

10/11/24 – Sell to Open 2 SQ 10/25/24 $74.00 C @ 75¢ (+$150)

Return 1%

10/28/24 – Sell to Open 2 SQ 11/1/24 $74.00 C @ $1.40 (+$280)

Return 1.9%

To date, with the 12 Calls on the 200 shares of SQ I brought in a total of $2750 in premiums. This is 19.3% on my investment since May 6, 2024. I think this is a great example of how Covered Calls can bring in nice returns.

I am starting an options trading class to be held on Staten Island. The class will be on Tuesday nights from 7 to 9pm. If interested, or have any questions, send me an email and I’ll get in touch with you. We will start in a few weeks.

As I was about to send this message I was just filled on another trade. I bought 100 shares of NEP last Tuesday at $19.90 and sold a Call that expired on Friday. I was not assigned so I sold another Call.

Sell to Open 1 NEP 11/8/24 $20.00 C @ 50¢ (+$50) 

Bringing in 50¢ does not sound like much but it’s a 2.5% return for a one week trade. If I did this every week it would be 130% for the year. I did the same trade last week. Only 50 more weeks to go lol.

Both of these trades above are great Grasshopper Trades.

 

Successful trading,

Steve

The Options Coach