There was just a report that there is unusual activity in Call buying in Arconic (ARNC). I’m thinking the stock will go up in the next week or 2. I bought 1000 shares at $27.53 and sold 10 contracts of the 10/20/17 $28 Call. This stock doesn’t have weekly options so I sold the Call expiring next Friday. I’ll be in this position for 10 days and received a premium of 42¢ for $420. A 42¢ premium on a $27.53 stock is a Rate of Return of 1.5% for a little over a week. This trade is a Covered Call and gets a Risk Factor 1. This trade fits into my “1 Week/1%” strategy. If I get assigned at $28 this will be a very nice trade with a total return of 3.2%.
Arconic Buy-Write
10/11/17 – Buy 1000 Shares ARNC @ $27.53
10/11/17 – Sell to Open 10 ARNC 10/20/17 $28 C @ 42¢ (+$420)
Arconic is a company created by Alcoa Inc.’s separation into two independent, publicly traded companies in the second half of 2016. Alcoa Inc. spun off its bauxite, alumina, and aluminum operations to a new company called Alcoa Corp. The ticker AA is Alcoa Corp formally Alcoa Inc.
Steve
The Options Coach