It was another week of few trades. In fact, I only made 1 this week. I made 1 last week with Advanced MicroDevices (AMD) which expired this Friday. Then I made a 1 day trade with RH which turned out to be a good one, one of my best ever! Between these 2 trades it ended up being a very nice week of locking in some cash. I locked in some money with the options trades but my account is down a bit because RH has been moving down. Since RH is down from where I bought, it might curtail my trades for a little while. This is why Naked Calls are my favorite strategy. I like to make money with premiums from selling Calls and not have to worry about owning stock short term. The market just hasn’t been conducive to Naked Calls lately; since Trump entered office. Let’s take a look at the trades that ended this Friday.
Last Wednesday, 2/21 I sold 20 contract Call on the 2000 shares of AMD I own. Since I’m holding the stock for a while I want to bring is some premiums to pay for margin interest and make a few bucks. I sold a $12.50 Call for a premium of 15¢ to bring in $300. The stock didn’t hit my Strike Price so I keep my premium and I keep my stock.
2/21/18 – Sell to Open 20 AMD 3/2/18 $12.50 C @ 15¢ (+$300)
3/2/18 – Expired 20 AMD 3/2/18 $12.50 C
Profit +$300
On Thursday 3/1, with it still unclear when RH will be releasing their earnings report, I took advantage of the large premiums. With the stock at $85 and 1 day until expiration, I sold a $90, 1 day Call for a premium of $1.75. I’m holding 2500 shares so I sold 25 contracts. As I mentioned in a recent post, I emailed the company and found out that RH will not be reporting earnings so I felt RH would not hit $90 by the next day. I felt it was a good bet for a 1 day Call with a premium of $4375. This might be the best 1 day premium I ever got. As I thought, RH did not hit $90. I keep my stock and I keep this very nice premium.
3/1/18 – Sell to Open 25 RH 3/2/18 $90.00 C @ $1.75 (+$4375)
3/2/18 – Expired 25 RH 3/2/18 $90.00 C
Profit +$4375
This 1 day trade made for a very nice week.
Total Weekly Gain +$4675
Steve
The Options Coach
Coach. I wish you well in RH. But at what point do you wave the white flag? I’m hoping for ur sake that the earnings when announced will be spectacular! But given the stock is down $2.80 in a strong market is not a good sign.
Yes Tony, I’m very concerned! However, I still have hope because the 8 day, 50 day and the 100 day moving averages are still well above the 200 moving average. If any of these MA’s cross the 200 day MA to the south (death cross) I’ll have my finger on the button. I’m hoping for a good day tomorrow. Earnings don’t come out until 3/29.