Yesterday I sold 50 contracts of AK Steel (AKS) $4.50 Calls. The stock has been moving nicely, in fact all stocks have been moving nicely! Today AKS is up 4.48%. With the market in recovery mode from the Brexit and AKS at $4.40 and raising, I decided to cover my AKS $4.50 Call. I just bought 5000 shares of the stock at $4.40. I would like to see the market to continue to move and AKS go above the $4.50 Strike Price and I get assigned on Friday. Now that I’m covered I don’t have to watch it every second the market’s open. When I sold the Naked Call I gave that trade a Risk Factor of 5. Now that I’m covered I give this Covered Call a Risk Factor of 2. I give it a 2, and not a 1, because I only bought the shares to cover the Call. I really don’t want to own the stock and there’s always a chance for the stock to go down. If I previously owned the stock, I would have given the trade a Risk Factor of 1 because I owned the stock anyway. So if the stock went down it would have went down whether I sold the Call or not. That Call would have been a low risk trade on previously own stock.<\/p>\n
<\/p>\n
I hope everyone understands this move and how I’m now protected. Sometimes I like to stay Naked and sometimes I like to cover my Calls. If you have any questions on this, please email me.<\/p>\n
<\/p>\n
Steve<\/p>\n
The Options Coach<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Yesterday I sold 50 contracts of AK Steel (AKS) $4.50 Calls. The stock has been moving nicely, in fact all stocks have been moving nicely! Today AKS is up 4.48%. With the market in recovery mode from the Brexit and AKS at $4.40 and raising, I decided to cover my AKS $4.50 Call. I just […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-1759","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75MP0-sn","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/1759","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1759"}],"version-history":[{"count":1,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/1759\/revisions"}],"predecessor-version":[{"id":1760,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/1759\/revisions\/1760"}],"wp:attachment":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1759"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1759"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1759"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}