We completed our first 4 weeks of trading for 2018. The beginning of a new year is normally pretty good for the market, and 2018 is no exception. In fact, 2018 is my best start since the inception of Main Street beats Wall Street. This is the start of our 3rd year. The trading year started on January 2, and to date I’ve locked in $28,240 in completed trades. Remember I started with a total of $120,000 between my trading account and my “Gift Account.” My trading account had $95,000. The unbelievable part is I didn’t make my first options trade until January 17th. I was holding select stocks in my trading account in addition to the positions in my Gift Account to help make January a phenomenal start. I know the $28,240 sounds crazy but that’s not even the entire story. These completed trades, and the gains from my stock positions going up, led my account to be up over $58,000 since the start of the year. I’ll be writing a complete report on this at the conclusion of January.
Most readers know I’m not a big fan of President Trump’s personality, narcissism or his lack of being “Presidential.” But I love the way he is handling the economy, and it looks like the financial gurus also approve. Corporate earnings have been great and many of his moves seems to have investors believing. The markets has been moving northbound since he stepped into the White House, and seem to hit new records highs a few times a week for his first year. If this continues, and you play the market correctly, with good decisions, this can be a real life-changer.
Let’s take a look at this week’s completed trades.
RH
My first trade of the week was a day trade with RH. I didn’t plan on a day trade but it ended that way in just an hour. I sold a 10 contract $99.50 Put. I received a premium of $2.50 for $2500. An hour later the stock jumped and the premium came down to $1.50. Remember Puts work opposite of Calls. Since I was only in the trade an hour, and I was up $1000 I decided to do a Buy to Close for $1500 to end the deal and stick $1000 in my mattress. I felt it was only Monday and I’ll have the entire week to make more trades. I don’t do many Puts so if you have a question on how they work send me an email.
1/22/18 – Sell to Open 10 RH 1/26/18 $99.50 P @ $2.50 (+$2500)
1/22/18 – Buy to Close 10 RH 1/26/18 $99.50 P @ $1.50 (-$1500)
Profit +$1000
RH
Also on Monday I bought 1000 shares of RH because I was assigned on the shares I owned the Friday before. I bought the 1000 shares at $99.90 and sold a $104 Call. Knowing, or at least thinking I know how RH moves, I sold my 1000 shares at $104.32 leaving my Call naked. It was only Monday, and I believed the stock would come back down before Friday so I could get my Call covered again. I sold the stock leaving my Call naked, but locking in a capital gain of $4420.
1/22/18 – Buy 1000 Shares RH @ $99.90
1/22/18 – Sell 1000 Shares RH @ $104.32
Profit +$4420
RH
I know all these trades can get very confusing but try to follow along. The stock came down to $102.75 and I bought the 1000 shares back to cover the $104 Call. The stock closed at $103.84 and I wasn’t assigned. I still own the stock but the Call expired.
1/22/18 – Sell to Open 10 RH 1/26/18 $104.00 C @ $1.50 (+$1500)
1/26/18 – Expired 10 RH 1/26/18 $104.00 C
Profit +$1500
U.S. Steel
On Monday Citibank upgraded U.S. Steel (X) and I felt it was a good opportunity to do a Buy-Write. I bought the stock and wrote a Call. The stock closed In-the-Money and I was assigned, as I wanted. I was in this deal for the premium, I only made $130 on the stock sale.
1/22/18 – Buy 1000 Shares X @ $39.37
1/26/18 – Assigned 1000 Shares X @ $39.50
Profit +$130
1/22/18 – Sell 10 X 1/26/18 $39.50 C @ 75¢ (+$750)
1/26/18 – Expired 10 X 1/26/18 $39.50 C
Profit +$750
Square
The way the NASDAQ has been moving I saw a good opportunity for a Covered Call with Square (SQ). I was assigned and this deal is also in the books. On this one I made a little more on the stock assignment, $350.
1/22/18 – Buy 1000 Shares SQ @ $44.65
1/26/18 – Assigned 1000 Shares SQ @ $45.00
Profit +$350
1/22/18 – Sell to Open 10 SQ 1/26/18 $45.00 C @ $1.05 (+$1050)
1/26/18 – Expired 10 SQ 1/26/18 $45.00 C
Profit +$1050
RH
On Wednesday I saw a great opportunity for a 5 contract Covered Call with RH. I received a premium of $2.10 for $1050. The Call expired but I was’t assigned. I still own the 1000 shares from the deal above and I own these 500 shares. I’ll be looking for a 15 contract Call on Monday.
1/23/18 – Sell to Open 5 RH 1/26/18 $105.00 C @ $2.10 (+$1050)
1/26/18 – Expired 5 RH 1/26/18 $105.00 C
Profit +$1050
Total Weekly Gain +$10,250
Any question, send them to my email.
If you haven’t done so yet, check out my holdings in my Gift Account.
Have a great weekend!
Steve
The Options Coach