Right at the close I made two moves. One with Yelp (YELP) and the other with GoPro (GPRO).
I had a Covered Call on Yelp. I owned 5000 shares at $38.38 and I had a $39 Call sold expiring today. With two minutes to the closing bell and Yelp at $38.78, it was clear it wasn’t going to get to my Strike Price of $39 before the close. I will keep the premium of $2250, which will be in my week ending report, but I wouldn’t be assigned on my 5000 shares. I decided I didn’t want to hold the shares over the long weekend so I bailed out. I sold the 5000 shares at $38.78 which gives me a $.40 gain per share for a profit of $2000. With the Call expiring and me selling the stock, I am completely out of Yelp. For now anyway! Here’s the sell order:
Sell 5000 shares YELP @ $38.78
Profit $2000
For my second trade at the close, I sold a Put on GPRO. I had a Put sold on GPRO with the Strike Price of $14 expiring at the close today. Again, with Two minutes before the closing bell GPRO was at $14.10. It was clear that the stock wasn’t going to drop below my $14 Strike Price. I decided to get a jump on next weeks trading and sell another 50 contracts of the $13.50 Puts to expire next Friday. I get to keep the premium of $850 from the expiring Put and I sold another with the premium of $.14 for a total premium of $700. If GPRO stays above $13.50 until next Friday, I will also keep this premium. If the stock get below $13.50, I’ll keep this new premium plus the 5000 shares will be put to me. Let’s see what next week brings. The market is closed on Monday for Labor Day so next week is a four day week. This is one of the reasons I wanted to sell this Put today. With the four day week the premiums will be lower on Tuesday. Here’s the Put order:
Sell to Open 50 GPRO 9/9/16 $13.50 P @ $.14 (+$700)
This was a fantastic week! Watch for my week ending report. The only trade that didn’t go great was my U.S. Steel 100 contract Put. I had a $19.50 Put sold and the stock closed at $18.90. The 10,000 shares of X will be put to me. Not a big deal. Let’s see what I can do with the shares next week. Until then, Enjoy the Labor Day weekend. The summer is over!
Steve
The Options Coach
Why didn’t you short X when it got above your strike price?
Hi Tony, I’m sorry I didn’t see your question earlier. Email is always better. In this situation I was hoping the stock would stay above my Strike. I was hoping the trading day would end with the expiration of the option and not have the 10,000 shares put to me. But in this case I really wasn’t worried about having the stock put to me because I have 100 Naked Call sold expiring in January and the shares would cover these contracts. When shorting you never know when the stock will take off on you. If you look at my Trade History, I did short two times last week but jumped out quickly with a $1000 and a $1700 profit. Shorting really does scare me and I wouldn’t want to short on a Friday going into a weekend. It turns out today the stock went back up to $19.50 and I just sold a 100 contract Call on the shares. I’ll be sending that post momentarily.