Winding down in Italy

I must say, this has been one hell of a trip! We just arrived in Rome to get our return flight home in the morning. The people, the food and the sights have all made for a once in a life time trip. I’ve been here before and I’ve been to many places around the world and I must say this was a great one! Talking about Mike Fiore and Fiore’s Pizza got me in many kitchens. If you come by Fiore’s Pizza in the near future you might reap the benefits of my kitchen time here in Italy. For you who live in NYC, I have a “Mike Fiore Day” coming soon. Mike’s birthday is July 26th and every year I have a free pizza day to remember this 9/11 hero. All the fire companies from the area come to remember Mike. This year his birthday falls on a Tuesday so we will be celebrating on Saturday, July 23rd.

Along with coming home I’ll be getting back into the market and “Main Street beats Wall Street.” I will also be getting to your emails to answer the questions. Sorry it took so long but I’ve been eating! lol.

 

Results week ending 6/10/16

I have 2 position I have to report on this week. One is with Facebook (FB) and the other is U.S. Steel (X). Today is Monday and I usually do my weekly report on Saturday or Sunday but for obvious reasons I didn’t get to it this weekend.

For the first position, lets take a look at FB. I’ve owned 1000 shares of FB for a while now. I’ve been selling the $120 Calls every week and have been bringing in some nice premiums, but the stock has been staying below the $120 Strike Price so I haven’t been assigned. Thats fine with me. I’ll just keep selling Calls and keep putting the premium money in my mattress. Last week I sold the $120 Call to expire this past Friday and brought in a premium of $.71 ($710). On Friday the stock was below the $120 so again my Call expired. I’ll take the $710 and put it toward this great trip. Here’s the order to sell the Call and the form of the Call expiring:

Sell to Open 10 FB 6/10/16 $120 C @ $.71 (+$710) 

Expired -10 FB 6/10/16 $120 C @ $.71

Total Profit +$710

For my second position, earlier in the week I sold 50 contracts of the U.S. Steel $16.50 Naked Calls to expire this past Friday. I really thought this was going to work out nice for me but a day or 2 before expiration Credit Suisse gave X a big upgrade and put a price target of $26. The stock jumped over $2 that day. This kind of thing happens all the time and there’s nothing you can do. If you’re on the wrong side of a trade you have to ride it out. As a result of this upgrade the stock was above the Strike Price on Expiration Day so I made an adjustment trade. I did a Roll out. For you beginners, you must know what Rolling is. You also must be familiar with the Option Order Form. Below is the sale of the option and the adjustment trade.

Sell to Open 50 X 6/10/16 $16.50 C @ $.23 (+$1150)

Since the stock was above the Strike Price and I was Naked I had to make a move. With the stock in the area of $17.25 and the Strike Price at $16.50, if I did nothing I would have had to buy the stock at $17.25 and delivered it at $16.50. That would have been a $.75 loss. On 50 contracts (5000 shares) that would have been $3750. A loss I wasn’t willing to take. With the Roll Out, I bought back the Call for $.70 (-$3500) and sold another Call with the Expiration Date of 6/24/16 and the Strike Price of $17. I not only Rolled Out but I also Rolled Up to $17 from $16.50. With this new Call I received a premium of $1.03 (+5150). Here’s the Buy to Close order and the new Sell to Open order:

 

Buy to Close position

Buy to Close 50 X 6/10/16 $16.50 C @ $.70 (-$3500)

 

Roll Up & Out

Sell to Open 50 X 6/24/16 $17 C @ $1.03 (+$5150)

 

When 6/24/16 comes around, if X is below $17, this deal will be over with a profit of $2800. If the stock is still above the Strike Price of $17 I’ll do another Roll Out. Let’s watch to see what happens!

 

Total Weekly Profit $710

 

I will be back in my office tomorrow. I don’t care where I travel, there are many beautiful places in this world but there is no place like home and there is no place like America.

 

Steve

The Options Coach