A few hours ago I sold a 50 contract Call on U.S. Steel. I brought in a premium of 20¢ for $1000. The stock has been coming down for most of the day and I just had an opportunity to buy my way out of that Call for 5¢ ($250) so I did. I sold for $1000 and I bought for $250 for a $750 profit in a few hours. Not Bad! Here’s the “Sell to Open” and the “Buy to Close” orders:
Sell to Open 50 X 2/10/17 $37 C @ 20¢ (+$1000)
Buy to Close 50 X 2/10/17 $37 C @ 5¢ (-$250)
Profit +$750
I’m hoping tomorrow the stock will have a bounce and I can sell another 50 contract Call.
When you sell a call you get into a short position. You sell first then you “Buy to Close” the position. Make sure you understand short positions and how they work.
Steve
The Options Coach