I was watching U.S. Steel (X) very closely today because I have a 50 contract $18 Naked Call expiring tomorrow and the stock was up to $18.67. As the day went on the stock came down to below $18 which made me very happy. Looking at the candlestick chart, it looks to me that the stock hit resistance. With this in mind, I just sold another 50 contracts of the $18 Calls expiring next Friday. This Call brought in $.69 for a total premium of $3450. I can cover my Call expiring tomorrow but I really don’t want to own the stock. I’m hoping the stock stays below $18 tomorrow and my Call expires. If it closes above $18 I’ll do a Roll Out. I’ll worry about the new Call I just sold next week. When I sold this Call the stock was at $17.98. Basically it’s an At-the-Money Naked Call so the Risk Factor is 5. Here’s the order:
Sell to Open 50 X 7/15/16 $18 Calls @ $.69 (+$3450)
Tomorrow the market will be closely watched!
Steve
The Options Coach