For the first time in 2017 I started my week without owning shares of U.S. Steel (X). I’ve owned 10,000 shares carried over from 2016, but those shares were assigned this past Friday as a result of a 100 contract Call closing In-the-Money on Expiration Day. With X up big yesterday I sold a 30 contract Call and last Friday, planning for the new week and my “2017 Challenge“, I sold a 50 contract Call. My 30 contracts have a Strike Price of $41.50 and my 50 contracts are at $39.50. Both of these are Naked Calls! Yesterday X was as high as $40.40 which had me a little concerned. Today the stock came down a bit so I just bought 5000 shares at $39 to cover my $39.50 Call. X has been volatile but is moving up nicely lately. I’m really not too concerned with the steel sector tanking. Now that I’m covered with my 50 contracts I feel better. At this point I’m not concerned with my $41.50 Calls since they are 2 and a half dollars Out-of-the-Money. However, because of the volatile, I’ll be watching closely! Now that I’m covered on these $39.50 Calls I feel I’ll satisfy my goals of my “2017 Challenge” for this week. Here’s the buy order for the 5000 shares:
Buy 5000 Shares X @ $39
When I sold this 50 contract Call I gave it a Risk Factor 4 because it was a Naked Call. Now that it’s covered I change it to a Risk Factor 1.
I am back in shares of U.S. Steel but it’s only 5000 shares and not 10,000 shares. 10,000 was a little too much for my new year plan. Please take a look at my “2017 Challenge” and see what my goals for this year are.
Steve
The Options Coach