Between my 5000 shares of U.S. Steel (X) being below my purchase price and waiting for my Tyson Foods (TSN Short position go in my direction, it’s gonna be a little hard getting to my weekly goal of $3000 as per my “2017 Challenge.” However, don’t count me out yet!
The 5000 shares of X and the 3000 Short shares of TSN had my margin buying power very low. Now that I’m out of the TSN Short position my buying power is back where I need it to get some work done. I got out of TSN yesterday, if you didn’t see that post hit this link, Out of Tyson Foods Short Position. If you have any questions on this trade send me an email.
With my 5000 shares of X on the back burner while I wait for it to get a little higher to get a decent premium, I just opened another position with X. I did a “Buy-Write.” With the stock a little lower than $36 I just got executed on my trade. I bought 2000 shares of X at $35.90 and I got a premium of 75¢ on 20 contracts ($1500). This position will expire this Friday, 3 days. After I got executed, the stock continued higher and as I write it’s at $36.25. I already own 5000 shares so I really don’t want to keep this new 2000 shares. I hope on Friday I’ll get assigned on these shares to end this position. If the stock closes above the $36 Strike Price I’ll keep the premium of $1500, plus make 10¢ on the stock for an additional $200.
This “Buy-Write” Covered Call is at a price I like U.S. Steel. I think it can go up for assignment, so I give this trade a Risk Factor 1. Here’s the “Buy-Write” order:
Buy 2000 Shares X @ $35.90
Sell 20 X 3/17/17 $36 C @ 75¢ (+$1500)
Now let me go see if I can bring in another $1500 to make my goal.
Steve
The Options Coach