Another great week! However, the stock I sold to bring in the great profit, I bought back. The stock I’m talking about is Netflix (NFLX). I bought 100 shares on 4/16/18 at $313.10 and I bought another 100 shares a day later at $333.85. The stock went all the way up to $420 but started down. While it was coming down I got spooked; I decided to sell. I sold the 200 shares at $390. With this sale I got out of the shares of NFLX so I locked in the profit. The stock seemed to settle down and I decided to get back in. My new buy is price is 100 shares at $395 and another 100 shares at $402. When I get out of these shares these prices will be where I get my gain or loss from.
I made a nice profit from the shares I sold and I’m hoping to get more profit from the new shares, in addition, possibly some premiums from selling Calls.
NFLX
4/16/18 – Buy 100 Shares NFLX @ $313.10
6/25/18 – Sell 100 Shares NFLX @ $390.00
Profit +$7690
4/17/18 – Buy 100 Shares NFLX @ $333.85
6/25/18 – Sell 100 Shares NFLX @ $390.00
Profit +$5615
NFLX
When the stock settled down I decided to jump back in. I bought 100 shares at $395 and sold a 1 contract Call. Because of the volatility I received a great premium of $6 for $600. The stock was moving up and down, while it was down I did a “Buy to Close.” The premium went down to $2 and I got out for $200, locking in a $400 profit. I should not have done this because the stock never went back up to the Strike Price. If I didn’t do the “Buy to Close” I would have locked in the entire $600 premium. No biggie!
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
RH
On 6/25 I sold a Naked Call on RH. I received a $2 premium on 10 contracts for a premium of $2000. This was a great deal! The stock never came near my Strike Price and I never had to cover this Call. The Call expired and I keep the $2000 premium. I love Naked Calls! I’m not able to do many as of late because the market has been moving up. Maybe with the volatility, because of the trade issues, I’ll be able to do my favorite strategy more often.
6/25/18 – Sell to Open 10 RH 6/29/18 $150.00 C @ $2.00 (+$2000)
6/29/18 – Expired 10 RH 6/29/18 $150.00 C
Profit +$2000
These few trades made for another great week of locked in profit.
Total Weekly Gain +$15,705
I had a fantastic 1st half of the year. Today starts the 2nd half. Watch for my post where I’ll talk about my 2nd half strategy.
Got out of NFLX to lock in the profit but I’m back in. Lets hope I can grab more profit from these shares.
Any questions on any of these trades please send me an email.
Steve
The Options Coach
Steve,
can you provide more details on Buy to Close and when you use it?
Hi Devan, I hope you had a great 4th of July.
There’s a few times when I use a “Buy to Close.”
When selling a Call on a Monday morning to expire that Friday: After I do the “Sell to Open,” if the stock goes down and I can get out of the position and keep half my premium, I’ll do a “Buy to Close.” If I sold a 10 contract Call for a $1 premium and the stock goes down that day to the point that the premium is down to .50, I’ll do the “Buy to Close” and lock in a $500 profit. I’ll sacrifice the other $500 with the hope the stock will come back up and I’ll be able to sell another Call that week for another $1 premium.
If you want to know a few more times I like to do a “Buy to Close” please send me an email. It can get a little lengthy. I think an email would be better to give a long answer.