I would like to welcome the new members to Main Street beats Wall Street. I see our readership went up about 10 from yesterday.
I bought 1000 shares of RH on 1/23/18 at $102.75. The stock has been down and my money has been locked up with the stock in the high 80’s. Today the stock moved a bit and with it at $92 I decided to take a little risk. I guess I’m tired of having my money locked up in the stock not bringing in any premiums. The stock was up to $92.50 and started down, with it at $92 I sold 10 contracts of the RH 4/27/18 $95 Calls. I’m hoping the stock stays below my Strike Price of $95 so I don’t get assigned. If I get assigned I’ll lose money on the stock sale. This option gave me a premium of 90¢ which is $900 on the 10 contracts. This option will expire this Friday. If the stock stays below $95 I’ll be very happy. I’ll keep my $900 premium and I’ll keep my stock. This trade is a Call Option sold against previously owned stock, but I have a chance of losing money on the stock if I get assigned so I give it a Risk Factor 3.
Sell to Open 10 RH 4/27/18 $95.00 C @ 90¢ (+$900)
I’m still trying to get a Call sold on my 200 shares of Netflix, 100 shares of Nvidia and 500 shares of Square. All shares are below where I bought. Once they get up a little higher I’ll get Calls sold and get decent premiums.
Any questions send me an email.
As I’m writing RH dropped below $90.
Steve
The Options Coach