4 Month Option Challenge

4 Month Option Challenge

I am going to do an options challenge.  A friend bet me I could not DOUBLE $2500 by years end by writing covered calls.  If there is one thing I like it is a good challenge.  I upped his bet that I could end the year at $7500 in my options challenge.

Starting tomorrow September 6th it will begin……

I will update this thread daily with my progress and trades so you can follow along as well.

First Trade was a purchase of NVAX (300 shares) for  at $7.36 and wrote a covered call (October)  with a strike price of $8 and collected $507 in premiums.  This gives us a cost basis of 5.67 per share.  Cost of trades were approx. $16 total.  We have now if the stock closes at 8.00 or higher (on Oct 21st) sold our stock for $9.69 when adding the call price and the option premium received.  If it closes below $8 we keep the stock and can sell it or write another option.

As of today (9/14/2016 8:22 am) the current stock price is at 7.96 (up .60 a share) slightly below our option’s call price of $8.  The high I have seen it is $8.18 a share.  The goal is to have the stock close at 7.99 on October 21st so the stock remains ours, and we keep the option premium.

If the stock is called from us at $8 per share we will profit .64 a share in price increase on the stock and 1.69 per share in option premium for a total of 2.33 per share.  for a 31.66 percent return on this trade (2.33/7.36)