This is the start of the 3rd year of Main Street beats Wall Street. And for the 1st few weeks of a year, 2018 is the least amount of trades I’ve made to start off a new year. The 1st week I made 1 trade which was selling 3000 shares of U.S. Steel (X) I was holding almost the entire year of 2017. I exited that position for a profit of $1200. Last week, the 2nd week of the year I did not make a trade. The problem was I started the year 2018 with a bunch of stock holdings and most were below where I bought in. Holding these positions, my margin account was pretty maxed out. I had to wait for my positions to rebound to exit and free up some money. As I said, I was able to get out of X with a profit and free up some margin. For my 1st trade of the week I exited a position with Paypal (PYPL). On 8/23/17 I bought 500 shares of PYPL at $60. I didn’t make this purchase to sell options, I bought because I liked the stock. This Wednesday I decided to sell the stock at $82.30. But I only sold 400 shares and transferred the other 100 shares into my “Gift Account.” With the sale of the $400 shares I made a profit of $8920.
Paypal
8/23/17 – Buy 400 Shares PYPL @ $60.00
1/17/18 – Sell 400 Shares PYPL @ $82.30
Profit +$8920
RH
To Start the week I was holding 2000 shares of RH. I had 1000 shares at $102.78, 500 shares at $89.75 and 500 shares at $91.25. With the stock up a few dollars from last week I decided it was time to bring in some premiums with selling some Calls. On Wednesday with the stock in the $95 area I sold a 10 contract $99 Call, covered by my 500 shares at $89.75 and the 500 shares at $91.25. I didn’t think the stock would hit $99, but if it did I figured I’d make a nice premium in addition to making a nice profit on the stock assignment. The stock did go above $99 and I was assigned.
1/3/18 – Buy 500 Shares RH @ $89.75
1/19/18 – Assigned on 500 Shares RH @ $99.00 C
Profit +$4625
1/5/18 – Buy 500 Shares RH @ $91.25
1/19/18 – Assigned on 500 Shares RH @ $99.00 C
Profit +$3875
1/17/18 – Sell to Open 10 RH 1/19/18 $99.00 C @ 75¢ (+$750)
1/19/18 – Expired 10 RH 1/19/18 $99.00 C
Profit +$750
In addition to owning the shares at $89.75 and $91.25, I also owned 1000 shares at $102.78. I didn’t want to sell a Call with the Strike Price of $99 because if assigned I would lose money on the stock sale. I did decide to sell a Call but I went out to the $100 Call. With the stock at $95 I didn’t think it would hit $100 in 2 days. Well, the very volatile stock did. The stock closed at $100.27. I did get assigned but it’s not a big deal. For this week I did take a loss on the stock but I think I’ll be able to buy it back on Monday, It’s only at $100.27. If I got it back at that price there’s only a 27¢ difference. Let’s see what Monday brings. However, I did sell the stock at $100 after buying for $102.78 so on the stock assignment I take a $2780 loss. I think I’ll get it back!…..I keep the $550 premium.
12/11/17 – Buy 1000 Shares RH @ 102.78
1/19/18 – Assigned on 1000 Shares RH @ $100.00
Loss -$2780
1/17/18 – Sell to Open 10 RH 1/19/18 $100.00 C @ 55¢ (+$550)
1/19/18 – Expired 10 RH 1/19/18 $100.00 C
Profit +$550
On Thursday, with the stock at $94.35 I decided to do a 5 contract “Buy-Write” with RH; I had money freed up from the sale of Paypal. I entered this position for the premium. I bought 500 shares at $94.35 and sold a $94.50 Call. This was basically an At-the-Money Call and I was hoping to get assigned, and I was. With the premium of $775 and making $75 on the stock assignment, this was a 1 day deal for a profit of $850. Money in the mattress!
1/18/18 – Buy 500 Shares RH @ $94.35
1/19/18 – Assigned on 500 Shares RH @ $94.50 C
Profit +$75
1/18/18 – Sell to Open 5 RH 1/19/18 $94.50 C @ $1.55 (+$775)
1/19/18 – Expired 5 RH 1/19/18 $94.50 C
Profit +$775
Even with the $2780 loss on the assignment of the 1000 shares at $100 I still had a huge week.
Total Weekly Gain +$16,790
The year started slow with hardly any trades, but this week turned out to be one of the biggest weeks ever. Plus I’m out of a lot of my stock. My only positions are AMD (2000 shares) and MU (1000 shares). Everything else in my Gift Account.
Steve
The Options Coach