Sold a 2 Contract U.S. Steel Call

Earlier this morning U.S. Steel went up about $2. I didn’t think it was gonna hold. When it was moving down and around $29 I decided to sell 2 contracts of the $28 Calls. I took a chance but I felt it would come down to $28. I planned on buying 200 shares when it hit $28. The stock did get down to $28 a little while ago but I felt it would go down further so I didn’t buy at $28. I’m glad I didn’t buy because as I write the stock is at $27.36. Tomorrow I’ll watch closely to see if I want to buy the stock to cover my 2 contract Call, but right now my Calls are Naked. I received a very high premium because when I sold the Call the stock was In-the-Money by $1.

Buy to Open 2 X 5/14/21 $28.00 C @ $1.60 (+$320)

 

This is a 2 contract Call but I’m not listing it as a Grasshopper Trade because it’s  Naked Call. Most Grasshoppers are not permitted to do Naked Calls. This is a Naked Call on a very hot stock so it gets a Risk Factor 5.

 

Successful trading,

Steve

The Options Coach