The market opened 10 minutes ago and my work day could be over! I own 5000 shares of U.S. Steel. With the stock down from last week I wasn’t able to get a Call sold yesterday. Today the stock opened up $1.50 and I just sold 50 contracts of the 3/3/17 $40.50 Calls to make a Covered Call. I received a premium of 65¢ for a total of $3250. After I sold for 65¢ the stock continued up and the premium, as I write, is at 85¢. I do not let this bother me! Once in a while you get lucky but not too ofter do you buy or sell at the perfect price. With my “2017 Challenge,” my goal is making $3000 a week. This Call alone brought me in $3250! I also have the Naked Call I sold on RH that brought in $1050. I like where I am and I might be done for the week. I will be watching all week to see if I have to make an adjustment trade but I won’t have to watch as close as normal. We do have 3 more days (after today) until expiration but at this point I feel another good week developing.
This Call is sold against 5000 shares of previously stock so this trade gets a Risk Factor 1. Here’s the order:
Sell to Open 50 X 3/3/17 $40.50 C @ 65¢ (+$3250)
I have plenty of buying power left in my margin account so I might look for a good deal to get next week’s goal started.
Any questions, send me an email.
Steve
The Options Coach
Hi, I would like for you to explain how you can have all these open positions. 5000 X @ 40.30 that would take 5000 X $40.30 =201,500 margin. 1000 DKS @ 52.40 that would take 1000 X 52.40=52,400 margin 20 SRPT calls $36.00 20X100=2000×36.00=72,000 margin. That would be $263,100 total margin. I like what you are doing here. I’m not looking to find something wrong. I was figuring how many contract I can trade with the amount of funds I have. Thanks
Hi Norman, Thank you for your question and your interest in “Main Street beats Wall Street” and what I’m doing. I received a very similar question from another reader a few weeks ago. This is what I wrote to him. His name is Jon.
Norman, my suggestion is to contact your broker and see exactly how they set up your margin account. I work with Charles Schwab. I think the key is if they give you a margin account with a large buying power, be carful! It can ruin your life! I no longer use my entire buying power to purchase stock, too much interest! I like to use it for Naked Calls and have it available for emergency. Even than, I leave a large amount of buying power in my margin account. At the moment, even with all my positions you mentioned, I still have $150,000 buying power in my margin account. If you have any further questions on this please send me an email. I’ll have more space for a more detailed explanation. Thanks, Steve