Just yesterday I bought 2000 shares of RH @ $75.08 and sold a 20 contract Call for a premium of $1 for $2000. With RH up over $3 today and my account looking very nice, I decided it take a little less money and get out of half of my Covered Call. I sold 1000 shares of my RH stock and did a “Buy to Close” on 10 contracts to get out of my obligation to deliver that 1000 shares this coming Friday. This “Buy to Close” cost me $1.65 for a total cost of $1650. I brought in a premium of $1, on the 10 contracts that’s +$1000. Buying my way out of this option leaves me with a loss of -$650 on the option only. I bought the stock at $75.08 and sold the 1000 shares at $77.35 for a profit of +$2270. With the stock gain and the option loss, I have a total profit of $1620. This is a one day profit on half my position, and it’s already in my mattress!<\/p>\n
10\/10\/17 – Buy 1000 Shares RH @ $75.08<\/p>\n
10\/11\/17 – Sell 1000 Shares RH @ $77.35<\/p>\n
Profit +$2270<\/strong><\/span><\/p>\n 10\/10\/17 – Sell to Open 10 RH 10\/13\/17 $76.50 C @ $1.00 ($1000)<\/p>\n 10\/11\/13 – Buy to Close 10 RH 10\/13\/17 $76.50 C @ $1.65 (-$1650)<\/p>\n Loss -$650<\/strong><\/span><\/p>\n <\/p>\n If I held until expiration, and selling at the Strike Price of $76.50, I would have made $1420 on the 1000 shares. And I would have kept the $1000 premium for a total gain of $2420 and NOT $1650. A difference of $770.<\/p>\n Some might say, why did you close out this position? Why not hold until expiration, 2 day away?<\/p>\n #1) Well, I did hold half my position for the complete profit. #2) You might not believe it but my account is up 75% in the last 3 months. That’s crazy! I’m trying my ass off not to give anything back. #3) This stock is so volatile it could go down well below my Strike Price by Friday, so I wanted to lock in profit. And if any of you have large profit in your account, I suggest you do the same.<\/p>\n As I write the stock is right around where I sold, $77.35, so hopefully I get assigned on my remaining 1000 shares and I get the total profit I original signed up for.<\/p>\n <\/p>\n Steve<\/p>\n The Options Coach<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Just yesterday I bought 2000 shares of RH @ $75.08 and sold a 20 contract Call for a premium of $1 for $2000. With RH up over $3 today and my account looking very nice, I decided it take a little less money and get out of half of my Covered Call. I sold 1000 […]<\/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-3664","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-X6","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/3664","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=3664"}],"version-history":[{"count":1,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/3664\/revisions"}],"predecessor-version":[{"id":3665,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/3664\/revisions\/3665"}],"wp:attachment":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3664"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3664"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3664"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Total 1 Day Gain +$1620<\/h4>\n