Hey Investors and Traders!
It looks like the overall market ended flat this week. However, our accounts should be pretty green since selling covered calls helps us make money when stocks prices trend neutrally!
Investment Ideas
Is it time to invest in Square SQ?
Square shares rose on Tuesday because they posted better-than-expected quarterly results and strong growth in their consumer payments app, Cash App, which had 30 million users as of June, up from 24 million at the end of last year!
Square reported $1.92 billion in net revenue for the second quarter, which is a crazy a 64% year-over-year jump! This stock has more than doubled this year as consumers gravitate to the use of digital payments during the pandemic.
If you want to start a position in Square, remember to buy 1-5 shares, let the price go up around 5%, and then buy some more. These growth stocks that don't pay a dividend can sometimes fall dramatically when there is a pullback. Remember to invest with discipline!
Trade of the Week
For those of you who sold covered calls on AMD a couple of weeks ago, congratulations! You should have made around $400-600 per contract, depending on your expiration date and strike price. Isn't it so amazing how you're making money by literally spending 5-15 minutes on your phone?
If your contracts expired last Friday and you want to re-enter AMD, you can consider selling a cash-secured put so you can get 100 shares of AMD cheaper. We made a video on this trade this week if you haven't watched it already but we'll give you the Cliff Notes version here:
Selling a Cash Secured Put on AMD
AMD - $84.76
Capital needed: $8,400
Expiration Date: September 4, 2020
Strike: $84 (Willing to buy the 100 shares at this price)
Premium: $460
If you are a beginner, you can consider selling a covered call on AMD. Here are the details:
Selling a Covered Call on AMD
AMD - $84.76
Capital needed: $8,476
Expiration Date: September 4, 2020
Strike: $85 (Willing to sell the 100 shares at this price)
Premium: $495
Thinking Big Picture
Remember, your goal with wealth building is to let your money work for you, rather than just letting all of it sit in the bank with inflation eating away at it each year. You want to only invest in high quality companies for the long-term, collect dividends, and sell cash-secured puts/covered calls to generate monthly income. If you can make around $500 per contract, think of how much you can make with 10 contracts or even 30 contracts! You can scale up to make $15,000 a month! Be patient and disciplined as you continue on your investing journey.
Until next time!
- Call to Leap Team
The following article is strictly the opinion of the author and is to not be considered financial/investment advice. Call to Leap LLC and the author of this article does not claim to be a registered financial advisor (RIA) or financial advisor. Please visit our terms of service and privacy policy before reading this article.