I had 3 trades come to an end this past week. 1 involved RH, 1 involved U.S. Steel and the last involved AK Steel. Let’s take a look and see how they worked out. We’ll start with RH.
I sold a Naked 30 contract Call on RH and received an 80¢ premium for $2400. The Call was In-the-Money on Friday, Expiration Day. I kept the premium and borrowed the stock from my broker and delivered the 3000 shares to the Call buyer. Please read the post explaining this, “RH Trade Explanation” and also read the post explaining buying the 3000 shares to replace the 3000 shares I borrowed, “Buy 3000 Shares RH to Close Position.” The Naked Call expired on Friday and the $2400 is in my mattress. If you want to read the post on the selling of the Call go to “Sold 30 RH Calls.”
Profit +$2400
My next trade coming to a conclusion is with AK Steel (AKS). I sold 50 contracts of the AKS 3/24/17 $$850 Calls and received a premium of 25¢ for $1250, “AK Steel Call Sold.” The stock started to move and I bought the 5000 shares to cover the Call. The stock never went above the Strike Price so the Call expired and I keep the premium. I also keep the 5000 shares.
Profit +$1250
With the U.S. Steel (X) trade I first bought 3000 shares of X and with the stock moving up, later in the day I sold a 30 contract Call against those shares. I sold the X 3/24/17 $37 Calls for a premium of 65¢ for $1950. You can read about it at “Sell 30 U.S. Steel Calls.” This Call also expired because the stock never went above my Strike Price of $37. I keep the premium and I also keep the stock.
Profit +$1950
Total Weekly Gain +$5600
This was a great week for bringing in a nice amount of premiums, However, it wasn’t a great week for the Steel stocks. All of my options involving steel stocks were Covered Calls. I keep all the premiums but the stocks are down from where I purchased them. This is the reason I prefer Naked Calls. But sometimes you have to cover the Calls and the stocks go down. It seem like this happened more than not. Now I have to wait it out for the stock to come back up. It’s all part of the game. You must know your risk tolerance! If you can’t handle your stocks going down you’re in the wrong game. I don’t like it but I understand this happens with Covered Calls. Let’s watch and see how it plays out with my stocks below where I bought.
Steve
The Options Coach