It’s very difficult to write this post because I’m watching the market like a hawk. Today I’m on my lap top and going back and forth from my trading account to this page on my site.
U.S. Steel (X) has been all over the the place with a low of $18.32 and a high of $19.49. When a 19 dollar stock moves like this it really raises the premiums because of the volatility. I’m concerned about my $19 Naked Call which expires today because we have been well above my Strike Price. But I still have confidence the stock will close below the $19 mark. With that feeling in mind I just sold another In-the-Money, 50 contract Naked Call for next week. Because of this, if the stock drops below $19 I might cover my Call for today. I really don’t want to own the stock but I now have 100 Naked contracts on X. 50 expiring today and 50 expiring next Friday.
Today with the stock at $19.40 I sold 50 contracts of the 5/13/16 $19 Calls for a $1 premium. On 50 contracts that’s $5000. It’s really nothing to get excited about yet. I still have a week to see how it will work out. At this point I’m more concerned about my Call expiring today’s.
The Call I sold today defiantly gets a Risk Factor of 5. This is a Naked Call that is $.40 In-the-Money. Here’s the order:
Sell to Open 50 5/13/16 $19 C @ $1.00 (+$5000)
I have so much confidence these 2 Calls are going to work to my advantage, but let’s watch closely to see how it works out.
Steve
The Options Coach