I’m at my desk and getting the trading week started early. Last week I bought 3000 shares of Micron (MU) and sold a 30 contract Call against them. That Call brought in a premium of $1050. On Expiration Day MU closed below my Strike Price. The result of that trade, I keep the premium and I keep the 3000 shares. This morning the Dow opened down, however, the NASDAQ opened up. A few minutes ago, with MU being in the NASDAQ was up 30¢ and I was executed on another 30 contract Call. I sold 30 contracts of the MU 1/13/17 $22.50 Calls and received a premium of 35¢ for a total of $1050. The same as last week! Since I previously owned the 3000 shares, this is a Covered Call and I give this trade a Risk Factor of 1. Here’s the “Sell to Open” order:
Sell to Open 30 MU 1/13/17 $22.50 C @ 35¢ (+$1050)
Please take a look at my page “1 Week/1%.” This trade falls into that strategy. Under that strategy I want to bring in a premium of 1% with a 1 week investment. I bought the 3000 shares of MU at $22.45. The total cost of the shares is $67,350. I brought in a premium of $1050. That’s a 1.5% return with a 1 week investment. Also read my page Rate of Return.
I also have an order in to sell a Call on U.S. Steel. It might get executed before I sent this post out.
Steve
The Options Coach