Facebook – Deep ITM Call Option Expiring June 18, 2021 – Day 2

The market gives and the market taketh away. Today, it taketh away.

Janet Yellen started to warn that Monetary and Fiscal Policy cannot both be running flat out for the foreseeable future without overheating the economy. The U.S. didn’t even spend this percentage of GDP throughout World War II, when government expenditures reached the highest point in U.S. history. So the markets, especially the NASDAQ (Down 1.88%) reacted poorly and Facebook only had one way to go, which was down.

Since I’m being very cautious as the market figures out where it’s going next, I didn’t add any additional positions, but I do expect somewhat of a rebound later in the week since many stocks hit the lower edge of this week’s expected move and I expect they to adjust upward. However, it could be that the market could continue correcting for a couple more days, so caution seemed appropriate.

My Long Call Takes Pain to the tune of <$380.70>

Yesterday when I opened my long option position, Facebook was at $323.10 and today closed at $318.36 (Down about 1.46%), so my long CALL option took some pain and lost $380.70.

Closed my Short Call

To offset the loss, I closed my short $330 Call and made $73.00

And re-established it at a lower level

Then I sold a $222.50 CALL for $107. According to ThinkOrSwim, I’m currently down $479.00 in the trade since the $222.50 CALL increased in value since I purchased it.

I can breakeven for the week if the stock closes above $321.85

The good news is that I can break even in the trade if Facebook returns to $321.85 by the end of the week, that’s the nice thing about selling premium against my long position.

Facebook – Deep ITM Call Option Expiring June 18, 2021 – John Wheeler

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