I own 10,000 shares of U.S. Steel. Yesterday I sold 50 contracts of the $36 Calls and today I just sold another 50 contracts, only today I sold the $37 Calls. I now have 100 contracts of U.S. Steel Covered Calls. Both 50 contracts will expire this Friday 2/10. Yesterday’s Call I received a premium of 40¢ ($2000) and today’s Call I received 20¢ ($1000). Today’s trade is a Covered Call on previously owned stock so I give it a Risk Factor of 1. Here’s the order:
Sell to Open 50 X 2/10/17 $37 C @ 20¢ (+$1000)
Sticking with my strategy of trying to get out of half of my stock position I sold the 2 Calls at different Strike Prices. Yesterday’s Call is a $36 Call that I hope to get assigned on, and today’s Call is a $37 Call which I hope to not get assigned. The bottom line is I want the stock to close this Friday a little below $37. If that happens I get assigned on my $36 Calls and keep the 5000 shares from the $37 Calls.
Steve
The Options Coach