Netflix (NFLX) continues to move multiple points in the same day. Yesterday NFLX was up to 93 and down to 88. When it was up around 92 I sold 10 contracts of the $95 Call expiring this Friday. As you know when selling Call Options you have Time Decay on your side. If the value of the option goes down, you make money. Well, Yesterday with the stock at 92 I got a premium of $1. On 10 contracts (1000 shares) the total premium is $1000. Today the volatility continues! So far the stock’s been down to 89.80 and up to 92.49. When it was down at 90 the premium was at $.40 so I bought my way out of the option. Yesterday I sold for $1 and today I bought back for $.40 leaving me a profit of $.60. On 1000 shares that’s $600. Here’s the buy order:
Buy to Close 10 NFLX 2/26/16 $95 C @ $.40
1 Day profit +$600
It feels good to get some money in the mattress. Today and tomorrow I’ll watch NFLX closely. If it comes back up I’ll sell another Call to expire this Friday. I’d love to get another dollar out of this week. If not, I sell one for next week.
Steve
The Options Coach