Earlier I sold 10 Naked Calls on Micron (MU). I sold the $62.50 Calls when the stock was at $60.80.
I just sold more Calls. This is the confidence I have that MU will not continue up. With the stock at $61.75 I just sold 10 11/20/20 $64 Calls for a premium of 65¢ for $650.
Sell to Open 10 MU 11/20/20 $63.00 C @ 65¢ (+$650)
When selling Naked Calls it’s smart to watch the stock and if the stock approaches your Strike Price you can buy the stock to Cover the Call. If you don’t buy the stock and the stock is above the Strike Price at the close of the market on Expiration Day, your broker will buy the stock to deliver the stock for you. At this point you will be Short the stock.
In this situation, with my Naked Calls, I might let this happen. I might let my broker deliver the stock and I’ll hold the Short position. With the Micron RSI above 80, I believe the stock will be coming down. If the stock continues up, I’ll make the decision later in the week. If the stock closes In-the-Money and I’m Short the stock, I’ll hold the Short position until the stock does come down.
If you have any question on this send me an email.
Successful trading,
Steve
The Options Coach