I know I should be relaxing more but while I’m listening to the waves with an eye on the computer, I keeping seeing deals I like. And you know me, I love a good deal!
While I’m watching X closely because of my Naked Calls, I decided to make one more trade. It’s only 11:08am here (12:08 in NYC) but this should be it for the day because the beach bar is calling my name. With X dipping below $36.50 I decided to sell 1 more Call. This time I did a “Buy Write” expiring today. I bought 5000 shares of the stock at $36.35 and sold 50 contracts of the $36.50 Call for a premium of $.34 ($1700). I would love to see the stock close a little above my Strike Price of $36.50 so I’m assigned on the stock. It’s been in a little downtrend for a few days and I don’t want to hold the stock over the weekend. This trade is a “Buy Write” which is a Covered Call so it gets a Risk Factor of 1. Here’s the “Buy Write” order:
Buy 5000 shares X @ $36.35
Sell to Open 50 X 12/9/16 $36.50 C @ $.34 (+$1700)
I just received an email from my broker with the trade confirmation from my earlier trade. The $37.50 Call I reported I received a premium of $.20 but it was confirmed I received $.23. So the premium was not $1000, it was $1150.
As I write the stock is at $36.34. Should be an interesting day!
Steve
The Options Coach