After a 2 week pullback in U.S. Steel (X) it’s been moving a little the last few days. With the stock at $24.75 and having a 25¢ premium I decided to do a 3 day “Buy-Write.” I bought 1000 shares of the stock at $24.75 and sold 10 contract $25 Call expiring this Friday. I’m hoping for the stock to go above my Strike Price and get assigned. I would get the 25¢ premium and make 25¢ on the stock for a 50¢ gain, which on the 10 contracts and the 1000 shares, would be $500. This trade is a Covered Call so it gets a Risk Factor 1.
U.S. Steel Buy Write
Buy 1000 Shares X @ $24.75
Sell to Open 10 X 9/29/17 $25.00 C @ $25¢ (+$250)
The 25¢ premium alone on a $24.75 stock is a 1% gain on my investment in 3 days. This fits into my “1 Week/1%” strategy.
Steve
The Options Coach