I bought 100 shares of HPQ stock after it broke above resistance trendline and I sold the 16.50 call option to mitigate downside risk . By buying 100 shares at 16.45 and selling 1 june 19th call @ 16.50 strike, I collected a 1.20 premium which protects the trade by 7% (break even price at $15.25). I will reach my max profit if the stock trades sideways or remains above 16.50 where I will profit 125$ or 7.5%.
Hit the like button if you want an update in June on how this trade performed.
Hit the like button if you want an update in June on how this trade performed.
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I was nervous about the earning and sold before the market close for a profit of $70. Price has since gone down 12% and now present a lower buy price. I opt for a stock that some upward momentum as this stock is in the doghouse for now. Perhaps 14.40 will be support again.