Earlier I sold 5 Calls on Square (SQ). I brought in a premium of 90¢ ($450). With the market pulling back and down over 400 points, and SQ following, I just did a “Buy to Close” on that option. I bought out for 45¢ ($225). This position is closed! I sold for $450 and bought back for $225 for a $225 profit in about 2 hours. SQ is still up about a dollar on the day. I’m out of my obligation of delivering my stock with a $225 profit. This is something I like to do. When I sell a Call and I can get out with half the profit in the same day, I like to lock in the profit and hope the stock goes back up to sell another Call before the week is over. Or the stock goes up and I’m not obligated to sell and keep the stock profit myself.
Sell to Open 5 SQ 6/1/18 $58.00 C @ 90¢ (+$450)
Buy to Close 5 SQ 6/1/18 $58.00 C @ 45¢ (-$225)
Profit +$225
This $225 is in my mattress!
If you have a question on the strategy send me an email.
Steve
The Options Coach