New Trade: POT

Potash Corp. was on my recent watchlist for a potential covered call trade. This stock has a trend of rising for 4wks from the end of July to the end of August. Despite POT’s recent decline of 23%, it appears to be rising into the trend. Once I saw an entry point on my chart, I picked up positions in two of my accounts.

Trading Leg
I purchased 2 Sep 40 calls @ $0.15. My exit is $0.35 with a loss limit of $0.10. The stock historically moves 8 – 10% during this trend so if needed I may adjust my exit to ride the trendline. 

Here’s a look at my potential profit:

# Shares or Contracts	Purch Price	Capital Out	Sell Price	Capital In	Comm & Fees	Gain / Loss	% Gain & Loss
2 Sep 40 Calls	0.15	30.00	0.35	70.00	10.00	30.00	100.0%

My charts for this trade:

 

Retirement Leg
I purchased 100 shares at $30.49. I’m going to sit and just let these rise and look to sell calls against them later. I may even add 100-200 more shares depending on how the stock performs. 

Here’s a look at my cost so far:

# Shares or Contracts	Purch Price	Capital Out	Sell Price	Capital In	Comm & Fees	Gain / Loss	% Gain & Loss
100 shares	30.49	3,049.00	–	–	2.95	–	-%

My charts for this trade:

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