Out of My META Long Call
Way back on Oct 7th META was at $590. Take a look at the candlestick chart; the stock was moving up strong right up to that date. I decided to buy a 1 contract Call with an At-the-Money position. I bought1 META 12/20/24 $590 Call for the price of $43. This one Call cost me $4300. Spending this high price for 1 contract shows the confidence I had in META. As soon as I bought this position the stock reversed. Again, look at the candlestick chart. The stock started moving sidewards with a slight downward trend. I had until Dec 20th so I did not worry. The stock stayed in this downward trend until about Nov 25th. Now I was worried. Not only was the stock down about $30 to $562 which was killing my Intrinsic Value, but with less than a month left to my contract the Time Decay was eating away at my premium and my position of $4300 was down $3500. I felt there was no way the stock could recover enough in the time remaining to bring me back from a $3500 loss. But, the stock started moving straight up on Nov 26th. Every day my loss was getting cut. Today META is up $14 as I write. I placed an order to sell this 1 contract for $44. I cannot believe it but I was filled on that order and I’m out of this position with a $100 profit.
10/7/24 – Buy to Open 1 META 12/20/24 $590.00 C @ $43.00
12/11/24 – Sell to Close 1 META 12/20/24 $590.00 C @ $44.00
Profit +$100
This is a great example why when buying options I go out with my Expiration Date a few months. This position had an Expiration Date of Dec 20th, if I went any shorter this would have been a loss.
When buying options you get in the position because you feel the stock is going to move up. You do not expect the stock to move down as soon as you buy. But it happens! And guess what? It happened to me again. On Monday I bought a 5 contract Call with PLTR and a 2 contract Call with SMCI and as soon as I bought the stocks started moving down, and they are still moving south. Welcome to options trading! I do have these positions until Jan 17th so I have a little time to see if I want to take some loss and bail out with some Time Value left or hang in there and hope the same happens as it did with META. I’ll keep you informed.
Successful trading,
Steve
The Options Coach
PS: As I was writing this post I placed an order to sell another position I bought on Monday and I was just filled. I bought 1 PANW 1/17/25 $390 Call for $15.85. As I was writing I placed the order to sell at $18.95. This gives me a two day profit of $300. I’ll take it! In the mattress it goes!
12/9/24 – Buy to Open 1 PANW 1/17/25 $390.00 C @ $15.85
12/11/24 – Sell to Close 1 PANW 1/17/25 $390.00 C @ $18.85