CLOSING $DHI OptionsAction Trade - mike

17aug - 3 months since this trade was on-air, with stock at 19ish the covered call is in the money and with no action by you ,the shares will be called away if stock stays as is at opex and you will have locked in a gain.. hopefully if you followed this trade you bought back the short calls when stock dipped into 14dollar range, since the strike month was that far out you would have had a good chance of reselling the short calls again on any rebound.

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23 may - on fast money tonight mike has a trade on DR Horton, a covered call, here is the video video clip

Sell the Aug 17 call for $1.50

odd selection again, looking at the chart. with stock at 16.85 today, the stock was near 18 just last week.. his trade caps the upside for next 90days at 18.50..sure its 10% like he said. but he is also commenting on how high premiums are. to me that means i want to sell premium but also to get paid on that premium as quick as possible, ie fastest time decay. mike is notornious for always going out a couple months on his trades. i dont like selling short calls that far out..too much movement in the market lately to be that sure, would rather go front month to get the faster time decay. if you are locked in to that 17strike level then the June 17 call is still at .70, would look to sell that one first, if stock below 17 at opex, keep all that premium, then sell a July covered call, then an Aug covered call.. the july is going to decay faster obviously than Mikes aug short call. Historically what i have done wrong with covered calls is sell them too close to ATM, like mikes strike..stock keeps going up and you kick yourself for not accepting smaller premium in exchange for a bit more stock upside.

google docs spreadsheet for mikes on-air trades -->>spreadsheet