I just reported I sold a 5 contract Naked Call on NVDA. I was in it about an hour, the stock dropped and I did a “Buy to Close” for a $2000 profit.
9/1/20 – Sell to Open 5 NVDA 9/4/20 $570.00 C @ $8.00 (+$4000)
9/1/20 – Buy to Close 5 NVDA 9/4/20 $570.00 C $ $4.00 (-$2000)
Profit +$2000
I have a rule. If I get into a Naked Call, and the stock moves to the point where I can keep half the premium I signed up for, I do a “Buy to Close” to close the position with the profit. Naked Calls are dangerous! With this position I brought in $4000 from a $8 premium and the premium went down to $4. On the 5 contracts (500 shares) it’s a $2000 profit. I was in the position less than an hour.
Successful trading,
Steve
The Options Coach