Last week I bought 100 shares of RH at $133. The stock looked like it was gonna move but I didn’t have the money in my margin to buy 1000 shares. The reason for this is I got involved in VF Corp. I bought the 100 shares just so I’m in the game with RH. Last week I also sold a 1 contract Call for a premium of $1 which brought me in $100. I really wasn’t in the position for the premium. I was in it for the stock gain. I was hoping to get assigned and make $600 on the stock in addition to the $100 premium. It didn’t work out that way because I wasn’t assigned. This morning, with the stock on the move, I just sold another $139 Call but this time I received a premium of $2 for $200. Again, I hope to get assigned to make the $600 on the stock sale.
Sell to Open 1 RH 7/27/18 $139.00 C @ $2.00 (+$200)
This would be a great “Grasshopper” trade. I got into the stock for $133 ($13,300) and sold a Call with a $2 for a $200 premium. That premium is 1.5%. If I get assigned at my Strike Price of $139 it will be a gain on the stock of $6 for $600. The total gain is $800 with stock gain and premium. An $800 gain on the $13,300 investment will be a 6% gain. This is perfect for a beginning trader.
Steve
The Options Coach