I just did a “Buy-Write” with RH. The stock was at $67 and I was deciding on what option I wanted to sell. I was deciding between two, the $67 Call with the premium of $1.25 or the $67.50 Call with the premium of $1.10. Both to expire this Friday, a 2 day Call. I decided on the latter. This is a very hot stock so I went with the little lower premium but if the stock continues to move and I get assigned I’ll make an extra 50¢ on the $67.50 Strike Price. This trade is a Covered Call so it gets a Risk Factor 1. With the $1.10 premium alone I get a Rate of Return of 1.6% which fits into my “1 Week/1%” strategy, even though it will expire in a few days. I would love to see the stock continue up and I get assigned. If that happens my Rate of Return will be close to 2.9%. Here’s the “Buy-Write.”
RH “Buy-Write
Buy 500 Shares RH @ $67.00
Sell to Open 5 RH 7/7/17 $67.50 C @ $1.10 (+$550)
Steve
The Options Coach