Going into the close I tried to do a Buy-Write on Yelp. I was executed on selling the Calls but I was not executed on the buying of the stock. The result is, I went into the close with a Naked Call, and the Call is In-the-Money. It’s not what I wanted but we will see what tomorrow brings.The Call I just sold was a 50 contract $41 Call expiring this Friday the 14th. I received a premium of $.66 for a total of $3300. This trade is an In-the-Money Naked Call so the Risk Factor is 5. Here’s the order:
Sell to Open 50 YELP 10/14/16 $41 C @ $.66 (+$3300)
The stock closed at $41.11. I’m hoping Yelp takes a little dip at the opening so I can buy the stock below my Strike Price of $41, I would have a Cover Call. If I get to cover my Call I’d like to see the stock go up and I get assigned on Friday. If the stock opens a lot lower, I’ll watch closely to see if I have to cover.
This Call alone, with a $.66 premium, gives me a 1.6% return on the week.
Steve
The Options Coach