Results Week Ending 2/14/25
The first week of the year was a bad one but I recovered well since then. In December I bought a number of options with the hope of a Santa Claus Rally. Fed Chair Powell threw a monkey wrench into my plan, and everyone’s plan, when he decided to give a dismal report about where he felt rates would go in 2025. With a new administration getting sworn in a month later I felt his report could have waited to see how a new presidency and new policies may influence the decisions of the Fed’s interest rate policies. Since he couldn’t hold his tongue there was no Santa Rally and the year ended on a down note. I carried some positions into the new year which gave me a bad first week.
I do have a few good news items. I ended 2024 up 72% and my trading has been going well after the first week of the year. I really haven’t been trading much but it’s been going well. The best week being last week, week ending 2/14/25.
I only had three trades that were closed, all with Palantir (PLTR). Two of the trades were long Call Options, the last was a short option. Let’s take a look at these trades.
Palantir
On January 29th I bought a two contract Call. The 4th quarter earnings were due on February 3rd and I wanted to be in the Calls for that event. With the stock at $78.05 I bought 2 PLTR 7/18/25 $75 Calls for a premium of$16. When buying options I always try to buy an Expiration Date out about six months for protection.
It turns out the earnings were great and the stock jumped. On February 10, having a nice profit, I decided to lock in my gains and I sold my Calls for a premium of $45.
1/29/25 – Buy to Open 2 PLTR 7/18/25 $75.00 C @ $16.00
2/10/25 – Sell to Close 2 PLTR 7/18/25 $75.00 C @ $45.00
Profit +$5800
I bought with the premium at $16, $3200 for the 2 contracts. And sold with the premium at $45, $9000 for the 2 contracts. My profit was $5800 for the one week trade. This is a ROI of +181%.
Palantir
On February 3rd, the day earnings were being announced after the close, I bought 2 more Calls before the earnings announcement. With the stock at $82.10 I bought 2 PLTR 7/18/25 $80 Calls. I paid a $16.50 premium. On February 11th I sold these 2 Calls for the premium of $43.70. Again I had a nice profit.
2/3/25 – Buy to Open 2 PLTR 7/18/25 $80.00 C @ $16.50
2/11/25 – Sell to Close 2 PLTR 7/18/25 $80.00 C @ $43.70
Profit +$5440
With these Calls I bought at $16.50 and sold for $43.70 for a total profit of $5440. With this position I my ROI was +164%
Palantir
I have been messing around with a new strategy. It’s called a “Poor Man’s Covered Call.” I will be writing about this very soon but I’ll touch on it here. A Poor Man’s Covered Call is when you cover a Short Call option with a Deep in the Money Long Call Option instead of covering with the stock. They call it a Poor Mans Covered Call because it’s much cheaper to buy a Call Option than to buy the stock.
It might get confusing but instead of buying the stock shares you buy a Call Options. You can cover your short position with the “right” to buy the stock. Again, I will be writing about this soon.
On February 7th, with the stock at $114 I bought 1 PLTR 8/15/25 deep in the money Call with the Strike Price of $80 for a premium of $43.
On February 14th I sold a short Call with the Strike Price of $120 for a premium of $170. I went with the $120 Call because I didn’t want to get assigned. I only wanted the premium. This position worked as planned. I was not assigned and I keep the $170 premium. Below is the Call I used to cover the short Call.
2/7/25 – Buy to Open 1 PLTR 8/15/25 $80.00 C @ 43.00
I like this Poor Man’s Covered Call strategy. I used the long Call to cover my short Call. I keep the $170 premium and If not assigned you keep the long Call for gains if the stock continues up.
2/10/25 – Sell to Open 1 PLTR 2/14/25 $120.00 C @ $1.70 (+$170)
2/14/25 – Expired 1 PLTR 2/14/25 $120.00 C
Profit +$170
I paid $43 for the Call and I brought in a $1.70 premium. This is a ROI of 3.9%.
Total Weekly Gain +$11,410
It felt good to have a big week. Let’s hope it continues!
Successful trading,
Steve
The Options Coach