Yesterday with RH up a few dollars I sold 20 contracts of the 2/16/18 $95 Calls for a $1.00 premium for $2000. Today the stock is volatile as usual. When the stock was heading down I entered a “Buy to Close” order at 50¢, $1000, on the 20 contracts (2000 shares). When I get into a position, many times, I’ll look to get out with half my premium if I think there’s a shot of getting back in the same week for another (higher) premium. Well, yesterday I sold the Call for the $1.00 premium and brought in $2000. Today with 3 and a half days left until expiration I was able to get out of the position by paying a 50¢ premium or $1000. In one day I locked in $1000 and this deal is over! Now, because of RH’s volatility, I’m looking for RH to rebound and I get to sell the option again and hopefully get another $1.00 premium. If that happens I bring in another $2000. If I don’t get to sell another Call my $1000 is already in my mattress and I’m happy.
2/12/18 – Sell to Open 20 RH 2/16/18 $95 C @ $1.00 (+$2000)
2/13/18 – Buy to Close 20 RH 2/16/18 $95 C @ 50¢ (-$1000)
Profit +$1000
I have to leave my computer to go to basketball practice. I just entered an order to sell 20 contracts of the same Call, the 2/16/18 $95 Call for a $1.00 premium. While I’m away, if the stock bounces up I’ll have a shot of selling the Call again for the $2000. If not, I’ll try again tomorrow.
Let’s go RH! If I get filled on my order it will give me a total of $3000 in premiums for the week with RH.
Email me any questions.
As I write the 50¢ premium I just did a “Buy to Close” with is up to 75¢. If the stocks moves enough to move the premium another 25¢ I’ll get filled at $1.00 for my $2000.
Steve
The Options Coach