Well, we are half way through 2017 and things are going pretty nicely. This was another great week for me! You might notice I’v been doing a lot of Covered Calls. Not my favorite strategy but when the stocks are running you cannot do Naked Calls. I didn’t do any “Triple Play Hedge” trades this week. The “Triple Play Hedge” consist of 1 Covered Call and 2 Naked Calls. As long as the stocks are moving up I’ll avoid the risk of Naked Calls.
Because of the amount of trades I have to report I’ll have to keep each explanation short. I had 11 trades completed this week. Every one went good. Let’s look at one at a time.
The U S Steel (X) trade was a basic Covered Call. Bought the stock and sold the Call. I was assigned. I made 15¢ on the stock sale for $300 and the $1500 premium. A total of $1800. A 4.1% return on a 1 week trade. Money in the mattress!
U S Steel
6/26/17 – Buy 2000 X @ $21.85
6/30/17 – Assigned 2000 Shares X @ $22
Profit +$300
6/27/17- Sell to Open 20 X 6/30/17 $22 C @ 75¢ (+$1500)
6/30/17 – Expired 20 X 6/30/17 $22 C
Profit +$1500
With Skechers (SKX) I did another Covered Call. Bought the stock and sold the Call the next day. Basically sold the Call At-the-Money. Only made 1¢ on the stock for $20. Hey, it coverers some commissions. I was in the trade for the premium. It was $1040 on the 20 contracts. The return was 1.8%. Not bad for a 1 week trade. Times it by 52 weeks and it’s 93.6%!
Skechers
6/26/17 – Buy 2000 Shares SKX @ $28.99
6/30/17 – Assigned 2000 Shares SKX @ $29
Profit +$20
6/27/17 – Sell to Open 20 SKX 6/30/17 $29 C @ 52¢ (+$1040)
6/30/17 – Expired 20 SKX 6/30/17 $29 C
Profit +$1040
I did 2 Covered Calls with RH. Both I bought 500 shares and sold 5 contracts. The first I bought the stock at $62.80 and sold the $63.50 Call. The stock is very volatile so I got a very high premium of $2. I normally don’t go for the very high premium but I’ve been watching RH and it just keeps going up so I took a shot. I was assigned and made $350 on the stock sale. I also keep the very nice premium of $1000. The total return was 4.3%. Times that by 52 weeks and it’s a whopping 223.6%.
RH
6/27/17 – Buy 500 Shares RH @ $62.80
6/30/17 – Assigned 500 Shares RH @ 63.50
Profit +$350
6/27/17 – Sell to Open 5 RH 6/30/17 $63.50 C @ $2.00 (+$1000)
6/30/17 – Expired 5 RH 6/30/17 $63.50 C
Profit +$1000
On Thursday, with RH moving crazy I decided to do another Covered Call. This would be a 1 day trade. This was an At-the-Money Call so I only made $10 on the assignment of the stock. I was in this trade for the 1 day premium, which was $600. Not a bad days work! I’m very surprised I was assigned on this Call. The Strike Price was $64.50 and the stock closed at $64.52. However, 1 minute after the close the stock dropped down to $64.25 which it’s still at as I write.
6/29/17 – Buy 500 Shares RH @ $64.48
6/30/17 – Assigned 500 Shares RH @ $64.50
Profit +$10
6/29/17- Sell to Open 5 RH 6/30/17 $64.50 C @ $1.20 (+$600)
6/30/17 – Expired 5 RH 6/30/17 $64.50 C
Profit +$600
Moving on to Alcoa (AA) also a Covered Call. Bought the stock at $32.35 and sold the $32.50 Call. I was assigned and made 15¢ on the stock for $150. But, again I was it the trades for the 50¢ premium on a $32 stock. With assignment I keep the premium of $500. The total gain on this trade is $650, a 2% return.
Alcoa
6/27/17 – Buy 1000 Shares AA @ $32.35
6/30/17 – Assigned 1000 Shares AA @ $32.50
Profit +$150
6/27/17 – Sell to Open 10 AA 6/30/17 $32.50 C @ 50¢ (+$500)
6/30/17 – Expired 10 AA 6/30/17 $32.50 C
Profit +$500
For my last trade to report I did a Covered Call on Weight Watchers (WTW). I didn’t think this trade was gonna work out so well. I bought the stock and as soon as I did the stock dropped. I didn’t think I’d get the Call sold but 2 days later the stock had a little bounce but not up to where I bought the stock. I’m very surprised I was able to get a 50¢ premium on a 2 day trade. 50¢ on a 2 day trade is a great premium! It fits into my “1 Week/1%” strategy. I bought the stock at $35.40 and sold the $33.50 Call. Friday the stock closed at $33.42 so I wasn’t assigned. The only Covered Call I wasn’t assigned on this week. Even with me struggling to get the Covered Call sold I still brought in 1.5%. That’s right! I put it in my mattress.
Weight Watchers
6/28/17 – Sell to Open 10 WTW 6/30/17 $33.50 C @ 50¢ (+$500)
6/30/17 – Expired 10 WTW 6/30/17 $33.50 C
Profit +$500
Sorry for so many trades but I’m concentrating on trades with 2000 shares or less so it’s causing me to do more trades. Overall a fantastic week! Let’s see how I do for the 2nd half of the year.
Total Weekly Gain $5970
Have a great 4th of July weekend! Make sure you fly the flag of this great country. God bless America!
Steve
The Options Coach