I had a very busy and very successful week. This weekly report might get a little lengthly but I must stick to my format and report & critique all my trades. This is the only way you’ll learn.
This week I had many trades come to an end. All the trades involved U.S.Steel (X), GoPro (GPRO) and AK Steel (AKS). Most of the trades involved U.S. Steel so I’ll review these trade first.
U.S. Steel
Some people write me and ask why I make so many trades with X. I’m a big believer in NOT getting involved in too many position at once. I’m also a believer in knowing the companies (stocks) you trade with, well. I feel I can sometimes predict how a stock is going to move in certain market conditions when I’m more familiar with the stock. I also like the premiums I get with X. Not too low but also not too high.
On Tuesday I was watching the way X was moving. The market was not making any big moves and X was moving up and down $.30 or $.40. After watching the stock move between $20.60 and $21 a number of times I said, the next time it’s down in that range I’m going to buy 10,000 shares. I’m not a Day Trader but I saw a good opportunity so I wanted to capitalize on the stocks trade range. The stock came down to $20.65 and I bought 10,000 shares. In 10 minutes the stock was at $20.77 and I jumped out. This was a $.12 gain on 10,000 shares for a 10 minute profit of $1200. I never want to get greedy so I stopped trading and finished the day +$1200. Here’s the two trades:
Buy 10,000 shares X @ $20.65
Sell 10,000 shares X @ $20.77
Profit +$1200
The next day, Wednesday, the market and U.S. Steel was moving the same way. The stock opened lower and I felt, because of the way the market was moving, it was going to go a little higher. Again, I bought 10,000 shares at $19.75 and 20 minutes later I ended up selling the shares at $20.03. Thats $.28 on 10,000 shares for a profit of $2800. This might be the best trade I ever made! $2800 in 20 minutes, thats unbelievable! I’ll repeat, I’m not a day trader and I don’t recommend it. It’s a very dangerous game. It just worked out for me because I’m familiar with the movement of X. You will not see me do this too often. Here’s the trades:
Buy 10,000 shares X @ $19.75
Sell 10,000 shares X @ $20.03
Profit +$2800
Also on Wednesday with the stock continuing to go higher, I did a U.S. Steel Buy-Write. This is when you buy the stock and at the same time you sell a Call. I bought 5000 shares and sold a three day Call expiring Friday. I sold 50 contracts of the X 7/22/16 $20.50 Calls and got a premium of $.40 for a total premium of $2000. I felt the stock was going up and I just wanted this great premium so I sold close to At-the-Money. I did not want to hold the stock so I used a Strike Price where I felt I would get assigned. This trade worked like a charm! On Friday the stock closed above the $20.50 Strike Price and I was assigned. I keep the $2000 premium and I made $.10 on the stock sale for another $500. Great three day trade!. Here’s the trades:
Buy 5000 shares X @ $20.40
Assigned on 5000 shares @ $20.50 (+$500)
Sell to Open 50 7/22/16 $20.50 C @ $.40
Expired 50 7/22/16 $20.50 C (+$2000)
Buy-Write Profit +$2500
AK Steel
Let’s move on to AL Steel (AKS). Last Thursday, July14th I sold a 50 contract Naked Call to expire Friday the 22nd. This was a Call with a little over a week to expire. The stock was at $5.30 and I sold 50 AKS of the 7/22/16 $5.50 Calls for a premium of $.16 for a total premium of $800. This was a Naked Call but if I was to buy the stock The Rate of Return would be 3% in one week. I really liked this trade. Since it was Naked I was making $800 without an investment. However, on Monday the 18th the stock started getting up toward my Strike Price. I ended up covering my Call with the purchase of 5000 shares of AKS at $5.48. On Friday, Expiration Day, the stock closed right on the Strike Price at $5.50. I was assigned but only on 4000 shares. I still own 1000 shares. The profit on these two trades is the $800 premium plus $.02 on 4000 shares I was assigned on for another $80. A total of $880 for the two trades. Here’s the orders:
Sell to Open 50 AKS 7/22/16 $5.50 C @ $.16 (+$800)
Expired 50 AKS 7/22/16 $5.50 C
Profit +$800
Buy 5000 shares AKS @ $ 5.48
Assigned 4000 shares AKS @ $5.50
Profit +$80
GoPro
Last week, for my last trade to report, on Friday I sold 20 Naked contracts of GPRO 7/22/16 $12 Call for a premium of $.32, a total premium of $640. This as a one week trade. The stock never got near the Strike Price so I never had to buy the stock to cover my Call. This Call expired and I stick the $640 premium in my mattress. Another great trade! Here it is:
Sell to Open 20 GPRO 7/22/16 $12 C @ $.32 (+$640)
Expired 20 GPRO 7/22/16 $12 C
Profit +$640
Total Weekly Gain $8020
What a great freak’in week! Make sure yo hit the links above and read the sections. Buy-Write is under Covered Calls, scroll down a little, you’ll see it. Also if you didn’t see I have a new page called Margin Account. Make sure you understand everything about margin before you open an account.
Any questions, sent me an email.
Have a great weekend!
Steve
The Options Coach