This week started off pretty busy on Monday and Tuesday but that was it for the rest of the week. On Monday I bought Netflix (NFLX) and U.S. Steel (X) stock and sold Calls then on Tuesday I bought Facebook (FB) stock and sold a Call.
Netflix
On Monday I bought 1000 shares of NFLX at $104.71 and sold 10 contracts of the $106 Calls to expire Friday. I received a premium of $1.50 for a total $1500. On Friday the stock closed at $103.81. The result was the Call expired, so I keep the stock and I keep the entire premium of $1500. I hope to sell another Call on the stock this coming Monday.
Profit $1500
U.S. Steel
On Monday I bought 5000 shares of X at $16.85 and did my Triple Play Hedge strategy. Please read the post Triple Play Hedge on X. Also read my page called Triple Play Hedge.
I sold (3) 50 contracts Calls. The first was with the Expiration Date of Friday with the Strike Price of $17 and I received a premium of $.40 for $2000. This was a Covered Call. Then I sold 2 more Call which were Naked Calls, both also 50 contracts. The first Naked Call was the $17.50 expiring 4/15/16 with a premium of $.55 for $2750 and the 2nd was the $18 Call expiring 4/22/16 with a premium of $.65 for $3250.
On Monday, the same day I sold the Calls, X took a big dip and the Triple Play worked like a charm. With the stock lower, I bought my way out of the 2 Naked Calls for a profit of $1000 and $1050 respectively. At this point I only had the stock and the Covered Call expiring Friday. At the close on Friday U.S. Steel closed at $16.55. The result of the Covered Call was the Call expired. I keep the stock and I keep the entire premium of $2000. The result of the entire Triple Play Hedge, I still have the stock to sell calls on Monday, and the total premiums I keep is $4050.
Profit $4050
On Tuesday I bought 1000 shares at $113 and sold 10 contracts of the 4/8/16 $114 Calls at $.75 for $750. It looked like I was going to get assigned but on Friday the stock had a big drop down and closed at $110.63. The result is I keep the stock and I keep the entire premium of $750. I don’t like that FB is 2 and a half dollars below where I bought but I’m hoping for it to bounce back Monday. I’m not too worried because I like FB stock. Let’s watch and see what happens.
Profit $750
Overall it was a great week, mainly because of my Triple Play Hedge. I think it’s worth looking into!
Weekly Total Profit $5300
This cash is in my mattress!
Have a nice weekend.
Steve
The Options Coach