It’s Sunday and I’m back home in NY. You might have read I had to go to Boston Thursday morning. As a result, I was in the car most of the trading day on Thursday. When I arrived and checked in at the Best Western there was only a few minutes left so I didn’t get any trading in before the closing bell. Friday I was staying in the room for expiration day while my wife Irene did some running around with her sister who lives in Boston. Expiration day at the Best Western was a disaster! The wifi was going on and off all day until it finally stopped working altogether. When I called the front desk, they informed me there was work being done on their wiring. When I told them I was involved in some “high finance” lol, they told me to go to McDonalds, “they have free wifi.” When I call their Corporate office I’ll let you know how they handle my anger.
I had three position exited this week; one with Facebook (FB) and two with AK Steel (AKS). I also had an options expiring with Yelp (YELP). I had to make a move because it was In-the-Money but the adjustment trade was interrupted with the failing wifi. I’ll fill you in!
AK Steel
If you are a “Main Street beats Wall Street” reader you know last week I had a 50 contract Covered Call on AKS. This means I owned 5000 shares. Last Friday, the expiration day of this Call, the stock closed right on the Strike Price of $5.50. I was assigned on the stock but on only 4000 of the 5000 shares, leaving me still owning 1000 shares. On this past Tuesday I sold the remaining 1000 shares. I bought in at $5.48 and sold at $5.58 giving me a $.10 profit of $100. Not large but not a loss.
Profit +$100
On May 11th I bought 1000 shares of FB at $119.90. At the time the stock was on a big run but as soon as I bought, the stock reversed and started down. It came all the way down to the $110 area. I love FB but this had me a little concerned because my account was down $10 on 1000 shares, $10,000. I had no doubt FB would some day be higher, but I do work on margin and I was worried about my margin interest bill if I held any length of time.
The stock was down for a short time then headed up. While this was happening I sold a few Calls which was more than covering my interest. This week FB was announcing earnings. The stock really went up well the last few weeks heading into this report. Even though I felt FB would have good earnings, I don’t like holding any stock while big news is coming out. Sticking to my guns, I sold my 1000 shares on Tuesday and the earning were coming out Wednesday after the close. I bought the stock at $119.90 and I sold at $121.40. I made a profit of $1.50 on 1000 shares for $1500. The earnings were great and the stock is now at $123.94. Oh well! I stuck to my rule and missed out on a little more profit. I’m happy I did because next time the stock will go down $10 lol. I’m proud of myself!
Profit +$1500
AK Steel
I had a second AKS deal this week. On Wednesday I sold a 50 contract Naked Call. I received a $.20 premium for a total of $1000. The Strike Price was $6.50 and the stock was hanging around that price all week, mostly above! On Friday it came down a little and I got the opportunity to cover my Call by buying the stock right at $6.50. The stock closed at $6.56. I was assigned my shares at $6.50 which is where I bought them, so that was a wash. The Call expired and I keep the premium of $1000. This was a great 3 day deal.
Profit +$1000
I also had a 50 contract YELP Call expiring Friday. The stock was In-the-Money so I was doing a Roll Out. I never do a Roll Out as one trade, I do it with two separate trades. I was really worried because as I was trying to move the option out a week or two the wifi was out. I got lucky and was able to exit my position with a “buy out” but I was unable to execute the second trade to complete the Roll Out. I’m going to try to complete it tomorrow but who knows what YELP will do. I will write a full report, which you will receive as soon as I figure out what I’ll do at the opening in the morning.
Total Weekly Profit +$2600
This weekly profit might be adjusted with the outcome of the YELP trade. I will keep you informed!
Steve
The Options Coach