Hello Investors,
The gap higher this morning was a little bit of a good news/bad news situation. It was great news for all of our positions with the exception of SPY. We followed the game plan we had laid out in our live class on Friday morning and took our position size down to 50 shares before the weekend. That made the trade a lower risk/reward. However, the gap higher left us with a losing 50 share short position in SPY. We closed out those 50 short shares this morning at a loss overall.
Here are the details:
We had originally sold the SPY 285.00 strike calls for +0.50 of income.
On Friday, we bought 20 shares at 284.60. We later bought another 30 shares at 285.10. That left us with 50 shares long and a short call that was going to have us selling 100 shares over the weekend. So, we were 50 of the 100 shares covered as planned. Over the weekend the executions took place and we ended up short -50 shares as expected. We bought those shares back this morning at 292.98. The total loss on this position was -$344.00.
With Moderna potentially finding a vaccine the markets gapped higher by 3% this morning. While that means that our hedge didn’t work out. Every other position seems to be flourishing. Our total portfolio values are up + by thousands. Our DIS position alone is up by more than $800! So, we want to take this gift and sell some more covered calls for income as follows:
We sold the DIS June 19th (monthly) 130.00 strike calls for +1.25 or +$125 we then used that income to buy 1 share at $119.27. Both orders have been filled.
We sold the LB June 19th (monthly) 16.50 strike calls for +0.25 or +$25 we then used that income to buy 2 shares at $12.37. Both orders have been filled.
We sold the DELL June 19th (monthly) 50.00 strike calls for +0.60 or +$60 we then used that income to buy 1 share at $43.89. Both orders have been filled.
We bought 10 more shares of BRK.B at $172.88 per share.
We have a “day order only” for the following pending trades:
Trying to sell 1 TMUS July 17th (monthly) 115.00 strike calls for +0.85
Trying to sell 1 DVN July 17th (monthly) 18.00 strike calls for +0.20
Trying to sell 1 EEM June 19th (monthly) 40.00 strike calls for +0.20
Trying to buy 1 BAC June 19th (monthly) 23.00/24.00 strike 1×2 call spread for +0.20 credit
Buying 1 of the 23 calls and selling 2 of the 24 calls.
We will see you all tomorrow at 10:00 a.m. ET for our weekly meeting!