With RH well below my buy-in price I just sold a 20 contract Call against my 2000 shares. With the stock up $2.30 today, and at $89, I sold the Call with a Strike Price of $95. I normally don’t go out $6 on my Strike Price but I really don’t want to get assigned. I’m in my 2000 shares with the average price of $102.80. With the stock up over $2 today, another $6 jump would be a big increase. Anyone who follows RH knows it can happen but I like my chances of it not getting above $95 by this Friday, my expiration date. I sold the 20 contract Call for a premium of $1 which gives me a total premium of $2000. If the stock does jump up another $6 by Friday I’ll just have to hope this very volatile stock backs off again for me to get back in. Either way I’m keeping my $2000 premium. And if the stock jumps another $6 thats a $12,000 jump in my account on my 2000 shares.
Sell to Open 20 RH 2/16/18 $95 C @ $1.00 (+$2000)
This trade gets a Risk Factor 1. It’s a Covered Call on previously owned stock. However, If I get assigned I’ll be selling my stock below my buy-in price which will cause a loss.
If you have any questions on me selling a Call with the hopes of not getting assigned, send me an email.
Steve
The Options Coach