Earlier I wrote that I placed an order to sell my Micron (MU) Calls I owned.<\/p>\n
On 7\/18\/19 I did a Diagonal Bull Call Spread on MU. I used an option I bought to cover a Call I sold. The Call I bought was a 10 contract 6\/19\/20 $45 Call. When I bought the Call the premium was $7.50, I paid $7500. Today I decided to break up the Diagonal Bull Call Spread and did a \u201cSell to Close\u201d on the Long Option I owned. I placed the order to sell for a premium of $10.50 earlier this morning, as reported in my last post. I was just filled on this order. I paid $7.50, or $7500 and sold for $10.50 to put $10,500 into my account. That\u2019s a $3000 profit on a $7500 investment for a Rate of Return of 40% in 2 months. This is the power of buying options. If done correctly you can get impressive returns.<\/p>\n
7\/18\/19 \u2013 Buy to Open 10 MU 6\/19\/20 $45.00 C @ $7.50 ($7500)<\/strong><\/p>\n 9\/16\/19 \u2013 Sell to Close 10 MU 6\/19\/20 $45.00 C @ $10.50 ($10,500)<\/strong><\/p>\n What a great way to start a week! For the readers who really pay attention, you might ask what about the Call I sold in the Diagonal Bull Call Spread to make the Covered Call? It\u2019s now a Naked Call! Well, I still have that Short option I sold. I am obligated to deliver 1000 shares of MU on 1\/17\/20 if the stock is above the $50 Strike Price. Here\u2019s that Short Option I sold with the Diagonal Bull Call Spread,<\/p>\n Sell to Open 10 MU 1\/17\/20 $50.00 C @ $3.50<\/strong><\/p>\n About 10 days ago I bought 500 shares of MU at $49.30 to partially cover my obligation. I bought these shares because I anticipated I\u2019d be selling my Long Call I owned. Now that I did sell the Long Call and bought the 500 shares, I\u2019m still naked on 5 contracts of the Short Call I sold. For Grasshoppers, I know this get complicated. This is all part of being an options trader.<\/p>\n I have until 1\/17\/20 to worry about the 5 contracts that are Naked. I\u2019ll watch closely and make a decision. As I write the stock is at $49.83. I might end up covering these 5 contracts today. I\u2019ll let you know.<\/p>\n Steve<\/p>\n The Options Coach<\/em><\/p>\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" Earlier I wrote that I placed an order to sell my Micron (MU) Calls I owned. On 7\/18\/19 I did a Diagonal Bull Call Spread on MU. I used an option I bought to cover a Call I sold. The Call I bought was a 10 contract 6\/19\/20 $45 Call. When I bought the Call […]<\/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-5720","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\/p75MP0-1ug","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/5720","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=5720"}],"version-history":[{"count":2,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/5720\/revisions"}],"predecessor-version":[{"id":5839,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/5720\/revisions\/5839"}],"wp:attachment":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5720"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5720"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5720"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Profit +$3000<\/strong><\/span><\/h4>\n
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