Zero To Hero Challenge Ep 30: Memestocks Gonna Meme

What a fun week for AMC shareholders! At first there was a terrifying after-hours dump from $5 levels to below $3.70 in the days following. This was after the news broke of a potential APE share conversion.

Just three days later the court case took a surprise U-turn where APE dumped and AMC pumped due to the ruling. AMC was able to claw back $5 levels briefly before settling for $4.81 going into the close.

I had been watching AMC closely for quite some time waiting for the perfect opportunity to appear and this was it! I took the chance and bought 100 shares at market price with a cost average of $3.75. Then these shares were used to write a covered call at the $4.50 strike price, expiring next week.

AMC is already well above my strike which means I am likely to be called away this week. The best case scenario for me would be if AMC drops back to $4.50 exactly and closes there by Friday, whereby my collateral of 100 shares would simply be returned to the account.

The contract which was sold was for a $21 premium making my breakeven price $4.71. This week I would like to see AMC sellers step back in to drop it below where my strike or breakeven is sitting, which is $4.71-4.50 or below.

If I do get called away the strategy then would be to use the cash to write a "cash secured put". This guarantees even more premiums into my balance to continue this challenge.

Here is an example of the premiums on a $4.50 put. It would only cost me $4.23 per share if assigned with a $27 premium.

0.12414151 BEE
1 comments

Congratulations @hotsauceislethal! You have completed the following achievement on the Hive blockchain And have been rewarded with New badge(s)

You distributed more than 71000 upvotes.
Your next target is to reach 72000 upvotes.

You can view your badges on your board and compare yourself to others in the Ranking
If you no longer want to receive notifications, reply to this comment with the word STOP

Check out our last posts:

Support the HiveBuzz project. Vote for our proposal!
0E-8 BEE