Today, expiration day, I decided to get next week started before I go out and enjoy the beautiful city of Austin. I can pretty much predict how this week is going to end with my active positions so I just sold 20 contracts of the Micron (MU) 6/2/17 $29.50 Calls for a premium of 35¢. The total premium is $700. Getting 35¢ on a $29 stock gives me a Rate of Return of 1.2% return in 1 week and fits into my “1 Week/1%” strategy. As I write, MU is at $29.15. I have a $29 Covered Call that expires today at the close. I’m hoping the stock drops below $29 so I don’t get assigned and I’ll have a Covered Call for next week. If it stays above $29, I’ll get assigned and I’ll have to watch closely to see if I have to buy another 2000 shares to make a Covered Call for next week or leave it a Naked Call as it is at the moment. With the stock at $29.15 but moving down and with the NASDAQ also moving down, I’ll give this trade a Risk Factor 4. It’s In-the-Money but it’s moving in the direction I need it to. Here’s the order:
Sell to Open 20 MU 6/2/17 $29.50 C @ 35¢ (+$700)
Steve
The Options Coach