This market is really on a rollercoaster! And so is Netflix (NFLX)! The stock was up big yesterday mid-session; Up to $410. Until late in the day where it closed all the way down to $390. When the stock was up to $410 I new I’d be assigned on my $402.50 Call and I was considering another Opportunity Lost. Then late in the day the stock reversed and came all the way down to $390. This morning with the stock well below my Strike Price I decided to jump out to lock in some of my premium and still have the potential to make money on the stock if it went back up. With today and tomorrow still left to trading this stock can move up $20. By doing a “Buy to Close” I locked in a $400 premium profit. I sold for a $600 premium and I bought to close the position for $200, for the $400 profit.
6/26/18 – Sell to Open 1 NFLX 6/29/18 $402.50 C @ $6.00 (+$600)
6/28/18 – Buy to Close 1 NFLX 6/29/18 $402.50 C @ $2.00 (-$200)
Profit +$400
Now that I did the “Buy to Close” I am out of my obligation to deliver my 100 shares of NFLX if it closes above $402.50 tomorrow.
If you are having trouble understanding this trade and my strategy behind it, please send me an email.
Steve
The Options Coach