September Expiration
Tomorrow is the expiration of five of our September covered call trades. It was another great month for the Cabot Profit Booster portfolio!
The good news is three will almost certainly be closed for full profits (PINS, APPS, BLDR), one is trading just above our strike price (MTH) and will be a nice winner, and only one is at a super tiny loss (JD). Here is the breakdown of all:
Meritage Homes (MTH) was our first September covered call that we executed. To recap, we bought stock at 99 and sold the September 100 call for $6.80.
With the stock trading at 101, our position is in good shape. That being said there is no guarantee that MTH will close above the 100 strike that we sold tomorrow afternoon. We will let this situation play itself out.
Should the stock close above 100 tomorrow we will walk away with our profit of $780 per covered call, or a yield of 8.45%. Come Monday we will not have a stock or option position in MTH.
If the stock closes below 100 tomorrow afternoon I will address this position Monday morning.
Our Pinterest (PINS) position has worked well. We bought stock at 34.5 and sold the September 35 call for $2.65.
With the stock trading at 37, we will likely walk away with our profit of $315 per covered call, or a yield of 9.89%. You do not need to adjust this position and come Monday we will not have a stock or option position in PINS.
Digital Turbine (APPS) worked spectacularly well as we bought stock at 22 and sold the September 22.5 call for $2.
With the stock trading at 32, we will walk away with our profit of $250 per covered call, or a yield of 12.5%. You do not need to adjust this position and come Monday we will not have a stock or option position in APPS.
Builders FirstSource (BLDR) had some ups and downs, but has worked very well and we are on our way to our full profit. To recap, we bought stock at 29.8 and sold the September 30 call for $1.80.
With the stock trading at 33, we will walk away with our profit of $200 per covered call, or a yield of 7.14%. You do not need to adjust this position and come Monday we will not have a stock or option position in BLDR.
JD.com (JD) is our only position that is at a small loss. We bought stock at 78 and sold the September 78 call for $3.50. With the stock trading at 74, we are currently at a loss of $50 per covered call.
It is very unlikely JD will close above 78 tomorrow. My plan is to let this position expire, and then we will address it Monday morning. You do not need to adjust this position.