The market is going down today. As my Tesla is currently down to $630 a share. It is down about $20 a share at this point.
Right before this, I decided to cover call my Tesla for a $5.2647 premium. Since I do own more than 100 shares of Tesla, I can sell my call option at a higher price point than right now. I have sold the call option for $690 for 1 contract for $5.2647 expires this Friday.
Essentially if the market goes down, I will just collect the premium and if the price moves up high and pass the $690 mark, I will sell my Tesla to fill the buyer's order. In essence, I will be losing the potential to make more money. As I am a long a Tesla, I don't want to sell the shares. However, I don't think this stock will pass the $690 mark this Friday due to it went up too much in the last three trading periods. If it were to go up more than $60 from now, I would make $6500 more anyway, so I am fine with it. If it got exercise, I will repurchase it for the higher price for the Tesla and cover call around $800 mark at next week as well.
If I collect the premium, it means I am lowering my cost basis for the Tesla by the premium amount which is $5.2647.
In the early morning, SQ went up by $6 a share. Since I got the most out of the SQ already, I re-sold the put for the next week with a $5 increase on the selling price. At the time of the sale, the price of the SQ was $216, which right now is around $209 as the market goes down. This stock has a margin of $5000, which is the largest for all of my portfolios. I decided to close out the Monday trade since I have too short on time. It only has 2 days and I have 20 contracts for a $10,000 margin with it. Still, I could have a profit with the trade.
Another trade I did was Etsy was going higher as well on yesterday, I sold the higher price for the Etsy as well. Also did not close the previous put.
SQ: 10 Dec 11 195/200 Put Vertical @ 1.0296 closed @ 0.54
SQ: 10 Dec 18 200/205 Put Vertical @ 1.0296 ETSY: 10 Dec 11 157.5/160 Put Vertical @ 0.5597
TSLA: 10 Dec 11 690 Naked Put @5.2647
WORK: 5 Dec 20 40 Call @ 3.2051may be closed @ 3.3
ETSY: 10 Dec 11 149/152.5 Put Vertical @ 1.0896 margin requirement $2500
ETSY: 10 Dec 11 157.5/160 Put Vertical @ 0.5597 margin requirement $2500
AMD: 10 Dec 11 149/152.5 Put Vertical @ 1.0896 margin requirement $2500
PLTR: 10 Dec 11 26 Put @ 0.9748 margin requirement $26000
COST: 10 Dec 11 370/372.5 Put @ 1.0596 margin requirement $3000
SQ: 10 Dec 18 200/205 Put Vertical @ 1.0296 TSLA: 10 Dec 11 690 Naked Put @5.2647 (Cover Put)
TSLA: 114 shares
I am not a financial advisor. Any trades listed are my own personal trades and meant for educational purposes only. Option trading bears high risk and high return strategy for trader.