This morning I reported that I bought 3000 shares of U.S. Steel (X). I bought the stock at $36.31 and as soon as I bought the stock it started going up. When I bought the shares I didn’t sell the Call because I was waiting to see how high it would go. It’s been hanging around the $36.90 all day and I was debating whether I wanted to just hold the stock to see where it would go tomorrow or sell the Call in case it went down tomorrow. I even thought about selling the 3000 shares with a nice day trade profit. Well, I decided to sell the Call for a 65¢ premium. I sold the $37 Call which will expire this Friday. With the 65¢ premium on the 3000 shares the total premium is $1950. Since I own the 3000 shares I give this trade a Risk Factor 1. Here’s the order:
Sell to Open 30 X 3/24/17 $37 C @ 65¢ (+$1950)
As I’m writing the stock is up to $37.20. We still have 4 days to go but I think this trade can work out nicely.
Steve
The Options Coach
Hi Steve,
The low of the day for X was $36.18 per share. How did you buy it at $35.31?
Hi Alex,
Yes my son just pointed it out to me that I had a mistake in my posts. He also pointed out that I had it correct on my “Active Trades” page.
I’m sorry! I bought the stock this morning at $36.31 and I sold the Call near the close when the stock was at $37. Which at the time was an At-the-Money Call.
I’ll make another post which will go out as an email correcting the mistake.
I’m also watching RH very closely because I have a Naked Call, and that stock is in the $35 area so I guess when I was writing I had 35 on my brain.
Thanks,
Steve