Wednesday, January 19, 2022

Buy to Close then Sell to Open NUE

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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