This market continues to move up, and even on days it doesn’t, it’s still been good for my positions. I didn’t have as many trades this week as last but I still had a great week. Let’s get into my trades that either expired or I exited early.
RH
My first trade of the week was on Tuesday the 10th. I bought 2000 shares of RH at $75.08. On Wed the 11th I sold 20 contracts of the 10/13/17 $76.50 Calls. I received a $1 premium for a total of $2000. The stock made a move up and when it was at $77.35 I decided to exit half my position, which was selling 1000 shares and doing a “Buy to Close” on 10 contracts. With the stock at $77.35 I wanted to get the higher price for the stock. If held to expiration I would be assigned at $76.50. The down side is I had to do a “Buy to Close” to get out of my obligation of delivering the stock. The “Buy to Close” cost my $1.65 for $1650. I only brought in $1 ($1000) on the premium so I lost $650. I made more money on the stock sale but lost money on the option.
Closing out RH Covered Call with a Profit
10/10/17 – Buy 1000 Shares RH @ $75.08
10/11/17 – Sell 1000 Shares RH @ $77.35
Profit +$2270
10/10/17 – Sell to Open 10 RH 10/13/17 $76.50 C @ $1.00 ($1000)
10/11/13 – Buy to Close 10 RH 10/13/17 $76.50 C @ $1.65 (-$1650)
Loss -$650
Total Gain +$1620
On the other 1000 share Covered Call I held till expiration. That worked out better. However, the money I had available from getting out of the 1000 shares and the option I invested into another position, I bought 1000 shares of SNAP. Here’s the 10 contracts I held until expiration on RH.
10/10/17 – Buy 1000 Shares RH @ $75.08
10/13/17 – Assigned 1000 Shares RH @ $76.50
Profit +$1420
10/10/17 – Sell to Open 10 10/13/17 $76.50 C @ 1.00 ($1000)
10/13/17 – Expired 10 RH 10/13/17 $76.50 C
Profit +1000
Total Gain +$2420
As you see, the 10 contracts I held until expiration I made $2420 and the 10 contracts I exited early I made $1620, a difference of $800. From the original trade I made a total of $4040 and I could have made $4840. Most of the time I like to get assigned and with the stock moving so well I was nervous it was going to take a big dip so I exited half the position. With the money I bought 1000 shares of SNAP and if you see below I ended up making $1450 on that trade. So, I ended up making an extra $650 because I exited the RH trade enabling me to make the $1450.
SNAP
10/11/17 – Buy 1000 Shares SNAP @ $14.75
10/12/17 – Sell 1000 Shares SNAP @ $16.20
Profit +$1450
If there is any question on this weeks trades or strategy, send me an email.
Total Weekly Gain +$5490
Let’s see how long we can keep this type of weekly gains coming in. Have a great weekend!
Steve
The Options Coach