Sold Another UAL Call
Yesterday I did my Triple Play Hedge Strategy with United Airlines (UAL). For you who are not familiar with this strategy I invented, please read my page here. It’s a strategy where I buy the stock and sell 3 separate Calls. In this case with UAL I bought 1000 shares of the stock and sold (3) 10 contract Calls. The 1st Call is Covered and the other 2 Calls are Naked. Yesterday I did a Buy to Close on one of the Naked Calls to lock in profit. This was a $30 Call I sold for a 2.05 premium. I bought the Call back for 80¢ for a $1250 profit. This left me with only 2 Calls sold in my Triple Play Hedge.
Today with the stock up on a down day I just sold another Call to make my position a Triple Play Hedge. I sold 10 contracts of the UAL 4/24/20 $31 Call for a premium of 60¢. This Call gave me total premium of $600.
Sell to Open 10 UAL 4/24/20 $31.00 C @ 60¢ (+$600)
Below is the entire Triple Play Hedge. The highlighter Call is the one I sold today.
United Airlines Triple Play Hedge
4/20/20 – Buy 1000 Shares UAL @ $28.00
4/20/20 ($28.00) – Sell to Open 10 UAL 4/24/20 $28.00 C @ $1.70 (+$1700)
4/21/20 ($28.25) – Sell to Open 10 UAL 4/24/20 $31.00C @ 60¢ (+$600)
4/20/20 ($28.10) – Sell to Open 10 UAL 4/24/20 $32.00 C @ 45¢ (+$450)
I already locked in $1250 by exiting the $30 Call yesterday. Today I replaced it with a $31 Call. If this position works the way I think it will I’ll keep all the premiums above. The $1700, $600 and $450. I would like to get assigned on the first Call at $28, get completely out of my position, and move on. If this happens this will be a very successful, 1 week position. BUT, we still have 4 days to go. I’ll keep my fingers crossed!
The reason I sell 3 Calls with my Triple Play Hedge is to bring in 3 premiums as hedging in the case the stock moves down. If you have a question on my strategy send me an email.
Successful Trading,
Steve
The Options Coach