Good morning Readers! I’m getting the week off to a quick start. Before I get into how, I would like to apologize for my last post which was “Results Week Ending 8/26/16.” I wrote that post late Friday evening and I think I was falling asleep lol. I do not consider myself a writer but that was bad. Toward the end of my post there was a few mistakes in sentence structure and words that didn’t make sense. I don’t know if it was spell check going into affect and changed words or I was actually sleeping lol. And I hit send without proof reading. Either way I did some editing on the post in my blog section. I can edit that, but once I send a post to emails obviously it cannot be edited.
Let’s get back to more important things, trading. If you read my last few post you saw on Tuesday, August 23rd I sold a 100 contract $20 Put on U.S. Steel (X). This option brought in a premium of $2000. The option expired this past Friday and I was exercised. I keep the $2000 premium and I was put the 10,000 shares at $20. You can see this in my Trade History. It will also be listed in my Active Trades for about another week. I had the 10,000 shares put to me at $20, and on Friday the stock closed at $19.88. Not so bad! This morning the market is up. Of course I’m watching X very closely because 10,000 shares is a very large position. Early in the trading day the stock was moving between it’s open and up to the $20.20 area. I really don’t like owning that much stock so I put a sell order in at $20.30. About 10 minutes later the stock went above $20.30 briefly and I was executed on the sell order. I bought the stock at $20 as a result of my Put, and I just sold for $20.30. This is a $.30 gain on 10,000 shares for a profit of $3000. However, the entire one week deal from selling the Put brought in $5000. $2000 on the Put premium and $3000 on the sale of the stock. I wish it was always this easy! Here’s the stock sell order:
Sell 10,000 shares X @ $20.30
Profit +$3000
This was a great deal but I still have a 100 contract $21 Naked Call on X until January. I’m just not ready to hold 10,000 for the life of that Call. I will be watching this Call very closely. Now I’d like to see X go down, at least stay below $21.
Any questions on this Put and result of the sale of the stock, send me an email.
Steve
The Options Coach