An Update of Another Successful Sale
Walmart shares were trending up this morning, so I looked at the options prices for selling my 200 shares once again. This is the fourth transaction, and this time I was able to get a higher price for my contract. This new contract calls for the price of the shares to reach $150 by Friday. If the shares stay below that price, I get to keep the shares and made a profit of $80.70. This makes my total profit for the four transactions $410.54. Because I am getting good at this, it only took me five minutes to make the $80.70 profit.
If I was working, and made $15 per hour, this profit is comparable to working for 5.4 hours. Of course, the added benefit is that I didn’t have to drive to work or do anything other than type a few numbers into Fidelity Investment’s Active Trader Pro.
Add up Capital Gains, Dividends and Covered Call profits
If the price reaches $150, my shares will sell, and I will have $30,000 in cash to reinvest. This is desirable because I have an interest in buying some more of ETF VYM. VYM is a Vanguard dividend-paying ETF. WMT’s yield at this point is too low and I like my TGT holdings better than WMT. Having said that, I have already received over $1,500 in dividends from my Walmart investment. Therefore, my total profit is the capital gain if the shares sell, the dividends and the gains from selling the covered calls.
LINK for TRAINING: SELLING COVERED CALLS (from previous post) This shows the actual entry of the -WMT210108C148 trade I entered on January 4th. In it I talk through the things I am looking at when I enter my covered call trade. It is quite easy. The video is about seven minutes long, so you can see my time to do the trade was less than ten minutes.
Previous Training Video Options Trading LINK for June 2020: OPTIONS LESSON ONE