Made 3 Grasshopper Trades
This morning I made trades with U.S. Steel (X), Macy’s (M), and Cleveland-Cliffs (CLF). I previously owned all the shares but was not assigned on them last week.
I own 100 shares of X at $23.15 and 100 shares at $24.25. I own 200 shares at an average price of $23.70. I sold 2 contracts of the X 5/7/21 $24 Calls for a premium of 60¢ for $120.
Sell to Open 2 X 5/7/21 $24.00 C @ 60¢ (+$120)
This Call gave me a Return of 2.5%. This trade gets a Risk Factor 1.
I own 200 shares of M at $17. Last week I sold 2 $17 Calls and was not assigned. Today I sold another 2 contract Call. I sold 2 M 5/7/21 $17 Calls for a premium of 45¢ for $45.
Sell to Open 2 M 5/7/21 $17.00 C @ 45¢ (+$45)
This trade gave me a return of 2.6% and also gets a Risk Factor 1.
Last week I bought 1100 shares of CLF. 100 was for a Grasshopper Trade. I bought the shares at $18.10 and last week I sold a $18.50 Call. I was not assigned. This week I decided to go with an In-the-Money Call. I own the stock at $18.10 but I sold the $18 Call. If I get assigned I’ll lose 10¢ on the stock sale. But I got a better premium with the In-the-Money Call. I sold 1 CLF 5/7/21 $18 Call for a premium of 50¢ for $50.
In-the-Money Covered Call
Sell to Open 1 CLF 5/7/21 $18.00 C @ 50¢ (+$50)
If assigned I keep the 50¢ premium but lose 10¢ on the stock sale giving me a 40¢ profit for $40. If I don’t get assigned I keep the $50 premium and I keep the stock. I still give this trade a Risk Factor 1.
Successful trading,
Steve
The Options Coach