Sold SFLY Uncovered Calls
I’m still betting against SFLY. It found support not far below its current price, but I think the upside is very limited. I lowered my targeted strike and today while SFLY was trading at 16.27 I sold three April 17.50 calls (QFYDW) on it and received $257.75 after commissions.
Those three calls are the total volume of calls today at that stike. Being in such an illiquid option isn’t always the best seat to be in for an option seller. If it moves against me, I might have a hard time closing it out.
The SFLY chart shows it’s hitting resistance again to the top side. Fundamentals show that it’s had good growth, but I believe they can’t maintain that growth at the current profit levels. There’s too much good competition that sells the same products cheaper. Throw in a five year PEG of 1.50 and SFLY is overvalued at the current price, much less than my OTM naked calls with a $0.90 cushion (aka premium).
Since I’m still not 100% comfortable selling naked calls like I am with naked puts, I’ll probably close this one out earlier than expiration to lock in a profit if I have the opportunity. SFLY is somewhat like the FWLT naked puts I sold earlier. Nothing new coming out that made me jump on it, but just a play that has worked before that I’ll probably keep trying at different strikes until it doesn’t work.
Comment by Kadena
Tuesday market. bought QQQQ calls for .72, sold for .82. Bought QQQQ puts for .96, sold for 1.10. This was a good day, however, keep in mind I am very early into my new daytrading. Only had about 6 trades to analyze, found some mistakes, and going to track next batch of trades to come up with overall results.
Comment by Alex Fotopoulos
Kadena, what kind of volume are you trading to make money on $0.10 moves? How much are your commissions?
Comment by Kadena
commissions in TOS are 1.50 for option contract, for buying and selling, so you’re right, take out $3 for each $100, or in a .10 cent move take out .03 cents/my volume is low while i’m working out how i do these — will use stops in the future, also
Comment by Options Strategery
I am glad you are trading small. Daytrading is too scary for me. And I am pretty risk tolerant (given my knife catching strategy). Good luck.
Comment by Alex Fotopoulos
I’ll consider selling a FWLT 60 if I see it flattening out better. It’s at the point now I thought it would. Now I’m just waiting to see if I’m right. At least I didn’t go in heavy to start with like I did with NVDA and MOT.
Comment by Zach
I actually like SFLY as a long position in here although I admit the technicals need to shape up before I would put money into it. One thing to note is that the original IPO was at $15 and that level will likely serve as support. Underwriters hate to see a name that has previously been successful break below that IPO range and will likely step in and support the stock buying it in here. - Not trying to talk you out of your position - just food for thought.
Comment by Alex Fotopoulos
I’m completely happy with it sticking around 15-16, even 17.49, I just don’t want it above 17.50. You have a good point though. I’m not selling calls any lower than 17.50.