September Expiration
Today is the expiration of September options and three of our positions will likely expire for full profits, and one will likely be a small loss or gain come Monday. Overall, it’s been another great month for us.
Let’s begin with our Dynatrace (DT) covered call. Initially, we bought the stock for 64.70 and sold the September 65 call for $3.20.
Today the stock is trading at 72.50. My plan is to simply let this position play itself out. If DT closes above 65 tomorrow, which looks likely, we will walk away with a nice $350 profit, or a yield of 5.70%.
Moving on to ON Semiconductor (ON). Last month we bought stock at 44.60 and sold the September 46 call for $1.40.
With the stock trading at 49.50, and above our short call strike of 46, we will simply let this position play out. Chances are high that ON will close above our short call at expiration, thereby reaping a healthy return of $280 per covered call trade, or a yield of 6.48%.
Next up is Colfax (CFX). Last month we bought the stock at 48.35 and sold the September 50 call for $1.00.
With the stock trading at 46.86, we will walk away with our profit of $100 per covered call, or a yield of 2.11%. However, CFX stock is below where we bought it, so our stock component of this trade is at a loss. Come Monday we will simply sell our stock position.
Builders FirstSource (BLDR) is the last stock we will discuss. We bought the stock at 50.60 and sold the September 50 call for $2.20.
With the stock trading at 52.80, we will walk away with our profit of $160 per covered call, or an overall profit of 3.3%. You do not need to adjust this position and come Monday we will not have a stock or option position in BLDR.
If you have any questions about the expiration of these positions, please don’t hesitate to email me.