![\"\"](\"https:\/\/i0.wp.com\/www.mainstbeatswallst.com\/wp-content\/uploads\/2016\/05\/Risk5-1.png\")
<\/a>Last week I bought 500 shares of RH at $45.80 because I thought it was time for it to move. The stock did move and I bought another 500 shares yesterday at $50.20. With this not being earnings season, looking at the earnings schedule was not on my mind. Today I was looking to sell a Call on my 1000 shares and I noticed the premiums were very high. These high premiums had me do a little investigation into company news. The first thing I noticed, \u00a0the earnings come out today after the close. Not Happy! There are a number of things I could do. One<\/strong> is to just sell my shares and take the profit on the stock. Two<\/strong> is just hold and hope for the best. Three<\/strong> is I could sell a Call with the very high premiums to get some insurance in the case the stock goes down after the announcement. I looked at my account and I was happy with what I saw so I decided to hold the stock and sell a Call. It’s a bit of a gamble but I was happy with my account. This is the type of gambling you should avoid if you get into options. I hope I don’t regret this move. I sold 10 contracts of the RH 9\/8\/17 $53 Calls. They will expire this Friday. The good part is I got a $3.20 premium. Well, it sounds good now. I hope it sounds just as good at 10 minutes after the close. This is a very dangerous trade so even though it’s a Covered Call it gets a Risk Factor 5<\/strong>.<\/p>\nSell to Open 10 RH 9\/8\/17 $53 C @ $3.20 (+$3200)<\/h4>\n
<\/p>\n
I bought my first 500 share at $45.80. If the earnings are good, this would be a great gain. If the earnings are bad, I give back all my profit! But keep the premium. The second 500 shares I bought at $50.20.<\/p>\n
This is a big gamble! The main reason I did it is I like the price of the stock. Even if the stock goes down, I’m hoping it will rebound faster because it’s low compared to a few months ago.<\/p>\n
Steve<\/p>\n
The Options Coach<\/em><\/p>\n Before I hit send on the above post I got spooked! The stock went up to $50.40 and I decided to cut my position in half. The 500 shares I bought at $45.80 I sold at $50.40 with a $4.60 profit. On the 500 shares thats a $2300 profit. I feel better!<\/p>\n Buy 500 Shares RH @ $45.80<\/strong><\/p>\n Sell 500 Shares RH @ $50.40<\/strong><\/p>\n Profit +$2300<\/strong><\/span><\/p>\n Now I’m trying to get out of 5 of the options contracts I sold. This is LIVE TRADING!<\/p>\n Once I’m out of 5 of the 10 contracts I sold, I’ll be left with 500 Shares at $50.20 and I’ll still have 5 contracts of the $53 Calls going into earnings.<\/p>\n I was just executed on the Buy to Close<\/strong> order for the 5 contracts. I sold for $3.20 and I just got out with the Buy to Close<\/strong> \u00a0for 3.00, for a 20\u00a2 profit on the option I sold at the beginning of this post. On the 5 contracts I got out of I made $100.<\/p>\n Sell to Open 10<\/span> RH 9\/8\/17 $53 C @ $3.20<\/strong><\/p>\n Buy to Close 5<\/span> RH 9\/8\/17 $53 C @ 3.00<\/strong><\/p>\n Profit +$100<\/strong><\/span><\/p>\n The bottom line is I still have 500 share of RH and a 5 contract Call sold against this. I feel much better going into earnings with half the position I had a half hour ago. I hope this post make sense to all. If not send me an email.<\/p>\n Let’s see what earnings do in about 15 minutes.<\/p>\n <\/p>\n Steve<\/p>\n The Options Coach<\/em><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Last week I bought 500 shares of RH at $45.80 because I thought it was time for it to move. The stock did move and I bought another 500 shares yesterday at $50.20. With this not being earnings season, looking at the earnings schedule was not on my mind. Today I was looking to […]<\/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-3465","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-TT","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/3465","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=3465"}],"version-history":[{"count":1,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/3465\/revisions"}],"predecessor-version":[{"id":3466,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/3465\/revisions\/3466"}],"wp:attachment":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3465"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3465"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3465"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}