I only had one trade come to an end this week. The stocks I’m holding are still moving nicely so I’m holding them for now. When I feel the stock will stop moving I’ll sell for some trading funds.
On Thursday, 3/21 I sold a 5 contract Call on 500 shares of Cree (CREE) I own. It was a Thursday so I went out to the following Friday, 3/29. I received a premium of 80¢ for $400. On Friday, 3/22 Cree took a dip pushing the premium down. I was able to do a “Buy to Close” to get out of the position for 20¢ or $100. It was a 1 day $300 profit. By doing this I locked in profit and I rid myself of the obligation of delivering the stock at the Strike Price of $60. If Cree moves up above $60 per share I will now get that stock gain.
3/21/19 – Sell to Open 5 CREE 3/29/19 $60 C @ 80¢ (+$400)
3/22/19 – Buy to Close 5 CREE 3/29/19 $60 C @ 20¢ (-$100)
Profit $300
I’ll watch to see what Cree does this week or I’ll sell another Call.
Total Weekly Gain +$300
If you have trouble understanding how these short positions work send me an email.
Steve
The Options Coach