It was another very nice week! I really didn’t do too much trading. I only had two positions expire on Friday. The two trades involved Yelp (YELP) and U.S. Steel (X). I did make two trades on Friday which will expire next Friday, Sept 2nd. One with Yelp and the other with GoPro (GPRO). Let’s take a look at the trades that ended this week.<\/p>\n
Yelp<\/strong><\/span><\/p>\n Last Friday, August 19th, I sold 30 contracts of Yelp $39 Naked Calls. With this Call I brought in a $.55 premium for $1650 on the 30 contracts. On Monday the 22nd I bought shares of Yelp to cover this Naked Call. To tell you the truth, when I bought the shares to cover the Call I made a mistake and bought 5000 shares instead of only 3000 shares to cover my 30 contract Naked Call. I’ve been selling 50 contracts all along and when I went to buy the shares on Monday, to cover the Call from Friday, I hit 50 contracts by mistake, out of habit. I don’t think it’s a big deal but in this game it’s very hard to make money and you can’t make mistakes, PERIOD!<\/p>\n With the 30 contract Call, the stock closed on Friday, Expiration Day, below my Strike Price. The result is my Call expired worthless. That’s worthless to the person who bought it. For me, I keep the $1650 premium and I keep the stock.<\/p>\n Profit +$1650<\/strong><\/p>\n Since the 30 contracts expired and I still own the 5000 shares, I’m free to sell another Covered Call against these shares. Friday, with the stock well below my Strike Price, it was clear I wouldn’t be assigned on my 3000 shares. I decided to get a jump on next week and sell another Call. I sold 50 contracts of the Yelp $39 Covered Calls expiring next Friday, Sept 2nd. This Call brought in a premium of $.45 for a total of $2250. Let’s watch next week to see how this Call plays out.<\/p>\n