In my last post which was reporting my Calls I sold on U.S. Steel, I mentioned I placed an order to sell Calls on Micron (MU). I was executed on those Calls. I own 3000 shares of Micron which I bought at $22.45 on January 4th. The stock has been hanging around the $22 area and I’ve been selling weekly Covered Calls bringing in nice premiums. Today the stock is up $1 so I had a decision to make. I was thinking about just selling the stock and making about 50¢ when it was in the $22.95 area. 50¢ would have given me a profit of $1500 (plus the premiums I brought in the last 3 weeks). With the stock approaching the $23 area I decided to sell an At-the-Money Call ($23 Strike Price) and bring in a premium of 30¢. If the stock gets to, and stays above $23 I’ll get assigned at $23, keep the premium and make 55¢ on the stock. This is what I’m hoping for. This Call falls into my “1 Week/1%” strategy. This is where I bring in a premium of 1% of money invested in 1 week. In this deal I actually invested $22.45 per share which is $67,350 for 3000 shares. With a $67,350 investment and a 1 week return of $900 it’s a 1.3% return. Make sure you read about my “1 week/1%” strategy and also read my page on “Rate of Return“ and understand the Rate of Return I look for. In this deal with MU I sold 30 contracts of the 1/27/17 $23 Call and brought in a premium of 30¢ for $900. This trade is a Covered Call on stock I own so the Risk Factor is a 1. Here’s the order.
Sell to Open 30 MU 1/27/17 $23 C @ 30¢ (+$900)
It was a busy morning! Please send any questions on my moves.
Steve
The Options Coach