Happy St. Patrick’s Day!
I had a little trouble finding trades to satisfy my “2017 Challenge” goal of $3000 for this week. The final day of the week is still young but it doesn’t look good. I know I could have done it but I didn’t want to compromise my strategy and get into a position I would regret. Safety First! It’s going to be a very nice week but not $3000. It looks like I’ll lock in a little over $1500. The main reason for the drop-off in my weekly gain is my 5000 shares of U.S. Steel (X) is down from where I bought the stock and I couldn’t get a premium I liked to sell Calls against those shares. X has been on a little run so hopefully I’ll be able to get back to work using the shares to bring in some cash.
Since this week was disappointing I decided to get started on next week and hopefully make up for this week’s shortfall. If you can sell a 1 week option on Friday you get a little better premium because there’s more “Time Value,” and this is a major part of the value of the premium. I’m not a big fan of AK Steel (AKS) but I see a deal with their $8.50 Calls I like. With the stock at $8.52 I just sold 50 contracts of the At-the-Money Calls. I sold the 3/24/17 $8.50 Calls for a premium of 25¢. This is a Naked Call but I’m willing to buy the stock if I feel the need to. I would like the stock to drop to the $8 area to give me a little breathing room. As I write the stock’s down to $8.45. This is an At-the-Money Naked Call so the trade gets a Risk Factor 5. This will chance as soon as I buy the stock. Here’s the order:
Sell to Open 50 AKS 3/14/17 $8.50 C @ 25¢ (+$1250)
I would like to welcome the new readers. We’re picking up a few new every week. If you’re on FaceBook please go the the Main Street beats Wall Street page and give it a like. Thanks!
Enjoy St Patty’s Day!
Steve
The Options Coach