With RH running high today, and me having margin money available, I decided to get a little deeper with RH. I just did a 5 contract “Buy-Write.” I bought 500 shares at $93.50 and sold a $94 Call. This Call expires this Friday and brought in a premium of $2 for $1000. I now own 2500 shares of RH and I hope to get assigned on these shares. If my strategy works and the stock closes above $94 this Friday, I’ll keep the $1000 premium and make $250 on the stock sale. It will be a great 2 day trade! If the stock doesn’t close above $94, I’ll continue owning 2500 shares. This is a Covered Call on a very hot stock with a “Strong Buy” rating so it gets a Risk Factor 1.
RH “Buy-Write”
2/14/18 – Buy 500 Shares RH @ $93.50
2/14/18 – Sell to Open 5 RH 2/16/18 $94 C @ $2 (+$1000)
Steve
The Options Coach
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