U.S. Steel Naked Calls

Today U.S. Steel is at it again! As I write the stock is up $2. I sold 50 contracts of the $39.50 Calls on Friday to start off this week and those Calls are already At-the-Money. I’ll watch closely to see if I’m gonna buy the 5000 shares to cover that Call.

This morning with the stock up I sold another Call. With the stock at $39.50 I sold 30 contracts of the $41.50 Call to expire this Friday. The premium was 40¢ for $1200. Now that I don’t own any shares I’m hoping for a little profit taking to bring the stock down a bit. I’ll be watching closely! This trade is a Naked Call but it’s still $2 Out-of-the-Money so I give it a Risk Factor 4. Here’s the order:

Sell to Open 30 X 2/17/17 $41.50 C @ 40¢ (+$1200)

 

Getting a premium of 40¢ on a $39.50 stock is a little more than 1%. This fits into my strategy “1 Week 1%.”

Please take a look at my “2017 Challenge” and send me any questions or comments.

 

Steve

The Options Coach

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