Good morning “Main Street beats Wall Street” readers. I’m off to a quick start this week. Did you read that I bought my way out of my U.S. Steel (X) LEAP Calls? If you didn’t, check your email from Friday. I’m very happy I exited that long sequence of trades because X is up this morning. I got out with a $5350 profit after many (successful) adjustment trades, and I just got back in. I exited that position because I felt X was hitting support (a bottom). Today X received an upgrade and it’s up over a dollar in early market trading. I still own 10,000 shares which I purchased for $19.50. Today with the stock on the move, with X up a dollar to $17.01, I sold 100 contracts of the 11/18/16 $20 Calls, and got a premium of $.70 for $7000 on the 100 contracts. I will be watching X closely because if it continues moving up in the coming days I might sell another Call, which would be a Naked Call, for a little insurance in the case there is some profit taking. This trade I give a Risk Factor of 1 because it’s a Call sold against previously owned shares. Here’s the sell order:
Sell to Open 100 X 11/18/16 $20 C @ $.70 (+$7000)
As I write U.S. Steel continues to fly!
Steve
The Options Coach