I had another fantastic week! All trades that came to a conclusion this week involved U.S. Steel (X), Gopro (GPRO) and Yelp (YELP). If you are a regular reader of Main Street beats Wall Street you know I’ve been dealing with these 3 stocks for a while now. There are hundreds of stocks but I like to finds stocks that fit into my strategy and work them. If you are familiar with a stock, sometimes you can predict how they will move with certain market moves; rather than with a completely unfamiliar stock. Let’s take a look at this weeks trades.
U.S. Steel
I’ve been involved with X in a long massy string of trades. It started with a 50 contract Naked Call in the beginning of July. Then another 50 contract Naked Call. When X stock price moved up on the 2 Naked Calls I had to do a few Roll-Outs as adjustments trades to prevent me from losing money. Eventually I combined these (2) 50 contract Call into a 100 contract LEAP Call. The result of the sequence of many trades was a +$5350. There is a very long drawn out explanation of all the trades in my post on Friday the 16th, when I got out of the position. If you didn’t see that post and need to look at all the trades leading up to the conclusion, please hit the link and it will bring you to the entire explanation. Out of U.S. Steel LEAP. It was great getting out of this situation with a real nice gain.
Profit +$5350
U.S. Steel
I own 10,000 shares of U.S. Steel (X). For the last few week X has been moving down and I’ve been selling Calls to bring in premiums for insurance on a declining stock. It’s been working great! I still own the shares, and the stock is still declining but these “insurance” Calls have been working nicely and I’ve been bringing in some nice premiums. Well, this week I brought in another nice size premium to help counteract the stock decline so my account didn’t suffer too much. On 9/8 I sold a 100 contract Call which had a premium of $.31 ($3100). This Call expired Friday and with the stock never getting to my Strike Price of $19.50, I still own the stock.
Profit +$3100
Gopro
Last Friday, 9/9 I was put 5000 shares of GPRO as a result of a Put I sold. These shares were put to me at $13.50. On 9/12 I sold a $14 Call on these shares and Friday I was assigned on the shares. I bought the shares at $13.50 and I sold (assigned) these shares at $14. That’s a $.50 gain on 5000 shares for a profit of $2500. Money in the mattress!
Profit +$2500
Gopro
On 9/12 I sold the 50 contract Call against the shares I just spoke about above. I sold a 50 contract $14 Call for a premium of $.16 for a premium of $800. The stock closed on Friday above my Strike Price and I was assigned. The biggest issue many traders would have is that the stock closed at $14.96. Not counting the $800 premium I received, I had an Opportunity Lost of $.96. On the 5000 shares that is $4800. The total Opportunity Lost is $4000 subtracting the $800 premium I received. This is all part of this business and I don’t worry about it. I feel this is one of the reasons I’m successful. If I come out ahead on an option trade, I’m happy! PERIOD!
Profit +$800
Yelp
On 9/12 I sold a 10 contract $38 Covered Call on YELP. On Friday the stock closed at $37.95. This Call had a premium of $.60 ($600). Since I was not assigned, I keep the premium and I keep my stock. Hopefully I get to sell another Call this week. But this $800 premium stays with me!
Profit +$600
Gopro
On 9/6 I did a “Triple Play Hedge” on GPRO. Take a look at it at this link, GPRO “Triple Play Hedge.” The second leg of the Triple Play was a 50 contract $15.50 Call that expired Friday. The first leg expired last Friday and brought in a premium of $.30 ($1500) plus this leg, $.20 for $1000. The final leg expires next Friday. Watch GPRO this week. It had a few upgrades and I think it will be moving this week. How it moves will determine how the final leg will end. With the second leg expiring this week I stuffed the $1000 into my mattress.
Profit +$1000
I had a fantastic week but I do have a thorn in my side. I still own 10,000 shares of U.S. Steel and it’s down $3 from where I bought. The last month I brought in some nice “insurance” premiums which prevented my account from taking a big hit from the falling stock. But with the stock down, it might be hard for me to get decent premiums unless the stock come back up a bit or I lower my Strike Price. Lowering the Strike Price would be a tough decision because I don’t want to get assigned at a lower price than my purchase price. Let’s see how the stock moves this week. No panicking aloud!
Total Weekly Gain +$13,350
Steve
The Options Coach