On May 19th I sold 50 contracts of U.S. Steel $15 Calls expiring July 15th. X has been running lately and I was getting worried on Expiration Day the stock was going to be $2 or $3 In-the-Money, which would leave me in a tough situation since it’s a Naked Call. Well, today with the Brexit fallout the stock dropped below the $15 Strike Price so I bought 5000 shares to cover the 50 Naked contracts. Now that I’m covered I hope the market will start recovering from the fallout because I now own the stock. Here’s the order to buy:
Buy 5000 shares X @ $14.95
The premium I received for selling the Call I just covered is $4500. Now I know I’ll be keeping the $4500.
Any questions, send me an email!
Steve
The Options Coach