This morning Weight Watchers (WTW) was up but looking at the Relative Strength Index (RSI) it looked like it may pull back a little. WTW is a very hot stock but I decided to sell a Call while the stock was up with the hopes of buying the stock if it dropped back. With the stock at $36.25 I sold 10 contracts of the 7/21/17 $36.50 Calls. I received a premium of 55¢ for a total of $550. The stock did drop a little as I hoped it would and I bought 1000 shares at $36.08. This trade is now a Covered Call so it gets a Risk Factor 1. Getting 55¢ on a $36 stock is 1.5%. Being a 1 week trade, this trade fits into my “1 Week/1%” strategy.
Weight Watchers Covered Call
Buy 1000 Shares WTW @ $36.08
Sell to Open 10 WTW 7/21/17 $36.50 C @ 55¢ (+$550)
With RH, I still own 1500 shares. I just sold 15 contracts of the 7/21/17 $70 Calls with the stock at $67.50. Last week I sold a $70 Call on these shares but I wasn’t assigned. With that Call I received a premium of 45¢ on a 3 day Call. With this Call today I received a premium of $1.25 for a 5 day Call. Not bad! This is a Call sold on previously owned shares so this is a Covered Call and it gets a Risk Factor 1.
Sell to Open 15 RH 7/17/17 $70 C @ $1.25 (+$1875)
I had Calls sold last week on U S Steel and Advanced Micro Devices to expire this Friday. With last weeks trades and the 2 I made today I already look pretty good to bring in some nice money for this week.
Steve
The Options Coach