I own 100 shares of RH at $138.86. After the earnings announcement in the 1st week of Sept the stock pulled back. On Sept 11th the stock was down to $122. The last few days the stock has been recovering and today it hit $138. Today being an expiration day I looked to see what I could get for a premium for next Friday’s expiration. I noticed the premiums expiring today were very high. I looked at a few news feeds to see what could be causing the high premiums but didn’t see anything. I’m only dealing with 100 shares so I didn’t dig too deep. The high premiums do indicate there possibly will be a stock move. Again, since I’m dealing with only 100 shares I decided to sell a Call expiring today. With the stock at $137.50 I sold 1 contract of the RH $139 Call expiring today for a premium of $8.20, for $820. That’s a crazy premium for a 1 day Call! I’m getting close to a 6% premium on a 1 day trade. This is a great Grasshopper trade!
Sell 1 RH 9/14/18 $139 C @ $8.20 (+$820)
With this high premium I think the stock will move and I’ll get assigned. What ever happens I keep the $820. Not a bad days work!
Steve
The Options Coach