Underlying Symbol: NUE
As we get close to options expiration on Friday January 21, I find some interesting action to take.
I purchased shares in Nucor symbol NUE last June 15, 2021. I always keep careful track of the lots I buy. Therefore, I know what basis I have on specific lots and pick my strike price based on that specific lot. Very important.
On October 21, 2021, I sold $115 calls on the lot I purchased in June. My basis on that lot is $100.25. I received a whopping $3.50 per contract. That money is in the bank.
Now NUE has sunk to about $104. Still above my basis on this lot. This makes the January 21 $115 option pretty much worthless. Therefore, I bought back the call for 6 cents. This liberated these shares and I immediately sold a new $115 call with an expiration date of February 18, 2022 and received $2.00. Since it cost me 6 cents to buy back the original call, my premium net on this call is $1.96. I'll take that for a month's worth of work.
BUY TO CLOSE:
SELL TO OPEN:
Keep track of your lots and work your calls. You can boost your income significantly with these techniques. And it is a lot of fun.
MM
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