Today is the expiration of October options and three of our positions will likely expire for profits. The details are below, but the headline is we are simply going to let these situations play themselves out today, and then will revisit where we stand Monday/Tuesday of next week.
Let’s begin with our SNAP (SNAP) covered call. Initially, we bought the stock for 75.00 and sold the October 75 call for $3.30.
Today the stock is trading at 76.5 My plan is to simply let this position play itself out. If SNAP closes above 75 at the close today, which looks likely, we will walk away with a nice $330 profit, or a yield of 4.60%.
Moving on to Cloudflare (NET). Last month we bought stock at 129.00 and sold the in-the-money October 126 call for $7.70.
With the stock trading at an astounding 165, having traded as low as 114 just two weeks ago, and well above our short call strike of 126, we will simply let this position play out. Unless something catastrophic occurs, NET will close above our short call at expiration, thereby reaping a healthy return of $470 per covered call trade, or a yield of 3.87%.
Next up is PureStorage (PSTG). Last month we bought the stock at 26.65 and sold the October 27 call for $1.00.
With the stock trading at 26.35 we will walk away with our profit of $100 per covered call, or a yield of 3.90%. However, PSTG stock is slightly lower from where we bought it, so our stock component of this trade is at a small loss … though of note, that could change by the close. Come Monday, if we are still in possession of PSTG stock, we will simply sell our stock position.
As always, if you have any questions about the expiration of these positions, please don’t hesitate to email me.