Yesterday I bought 1000 shares of RH at $99.90 and sold a 10 contract $104 Call. Also yesterday, RH went all the way up to $105. When it started to drop back I took a calculated risk and sold my 1000 shares at $104.32. I did lock in a $4.42 per share profit on the day trade for $4420, but I left my Call naked. This was a very dangerous move because RH is a hot stock but I felt strongly about it going down. I’ve been watching RH a long time and sometimes you can make a really good “educated guess.” Well it did go down and I just bought the 1000 shares back at $102.75 to cover my Call again. Now that I’m covered I’ll be keeping my $1500 premium. That’s if I don’t make any more moves lol. If things go the way I want, RH will go above $104, I’ll get assigned, I’ll keep the $1500 premium, plus make another $1.25 on the stock ($1250).
Buy 1000 Shares RH @ $102.75
As I write the stock is up to $103.15
If you haven’t seen my new page about my “Gift Account,” please check it out.
Steve
The Options Coach