Sold U.S. Steel Naked Calls

U.S. Steel (X) received a downgrade today by Argus. With the stock at $22.60 I sold a 10 contract 3/19/21 $25 Naked Call. This gave me a premium of 30¢ for $300. I do not think X will get up to $25 before this Friday. I do not believe I’ll have to deliver these 1000 shares.

Sell to Open 10 X 3/19/21 $25.00 C @ 30¢ (+$300)

This is a Naked Call option and it’s not for Grasshoppers. This trade gets a Risk factor 4. As I’m writing the stock is down to $22.25. When you sell a Naked Call you want the stock to go down. You do not want the stock to get up to the Strike Price. In this case the Strike is $25. If X does not get to $25 before Friday I’ll keep the premium and will not have to deliver the stock. I’ll make $300 with no investment! I’ll watch this, and all Naked Calls very closely.

 

Successful trading,

Steve

The Options Coach