The Closing Print live trading and financial blog during market hours.

Steel stocks are on the move. Several candidates look primed for higher prices, including, but not limited to U.S. Steel. We will likely day trade some of these names today, much like we did with AMD and NVDA on Tuesday for handsome gains. Join Us! 

Since we are bullish, we would like to see RSI, STO and MACD continue on their northbound train. Price is above the 9/20ema. And, the stock broke out of a small 5 day flag on Tuesday. We could buy the shares and swing the position, with a stop at 40.00 or we could sell some covered calls.


We are looking for a quick trade on U.S. Steel (X) with the weekly options expiring this Friday.

U.S. Steel X 41.43 (+1.63) 2017 24-FEB 40.5 (3) 1.38 1.1 3.3 10
To enter this trade, buy shares of X stock at $41.43 per share in multiples of 100 shares and sell 1 option contract per 100 stock shares of the 2017 24-FEB 40.5 call option for $1.38. This trade will expire in 3 days and return 1.1% if the stock is assigned at expiration.

If we sell the 24-FEB 40.50 strike at 1.38 or better we could collect $138.00 per option contract. With a 1000 share trade, we stand to make $1380.00 in premium. The trade works like this:

X Options Trade

Considering the premium received, our cost basis becomes $40,090.00 which is also our break even if the stock suddenly declines. Unlikely.

If you are more bullish and think price will reach 42.00 in the short term, you could sell the 17-MAR 42.00 call for 1.93 bid. These expire in 24 days.

You could generate $1,930 by trading a covered call. You could sell 10 contracts of X 2017 17-MAR 42.00 CALL. If the stock were to rise before expiration you could make a profit of $2,360. This trade will also get you 4.6% worth of downside protection for your stock.
Money on the Table: Potential Profit if Stock is Above Strike: Downside Protection:
$1,930 $2,360 4.6%

Of course you could just buy the common and forget about selling covered calls, while the stock looks ready to run higher.

Happy Trading – CV