I’m still reeling a bit from the set up and break down of my Oktoberfest, but it’s Monday morning and it’s time to try and get the party paid for lol.
This morning I did 2 Covered Calls. One with Micron (MU) and the other with RH (RH). With MU, last week I had 2000 shares but was assigned on 1000 as a result of a Covered Call where the stock went above my Strike Price. This Covered Call expired this past Friday. The remaining 1000 shares is involved in a LEAP Covered Call. Today I bought another 1000 shares at $35.55. Now I have 2000 shares again and I sold a 20 contract 9/29/17 $36.50 Call. With this 20 contract Call, since I only own 2000 shares my LEAP is now Naked. I’m not concerned because it doesn’t expire until January. After this Friday I’ll have my LEAP covered again. I hope this makes sense. The bottom line is I own 2000 shares and have 30 contracts sold. The 20 contracts I sold today and the 10 on the LEAP. Because of having a Naked situation involved in this trade it becomes more risky. This trade gets a Risk Factor 3. The 20 I did today I received a premium of $1.00 for $2000.
Buy 1000 Shares MU @ $35.55
Sell 20 MU 9/29/17 $36.50 C @ $1.00 (+$2000)
With RH I owned 1000 shares and on Friday I was put another 1000 shares as a result of the expiration of a 10 contract PUT where the stock closed below my Strike Price. Now owning 2000 shares, this morning I sold a 20 contract $74.50 Call for a premium of $1.00 for another $2000. Right now the stock is at $72.25. This is a Covered Call on previously owned stock so I give the trade a Risk Factor 1.
Sell to Open 20 RH 9/29/17 $74.50 C @ $1.00 (+$2000)
I like my start to the new week. These 2 Calls gave me a total of $4000 in premiums. As long as MU and RH does not tank these 2 trades can give me a nice week.
Steve
The Options Coach