RH Sale @ "$92"

I sold my June 19 2015 $80 call option today for $12.00.  The "$92" in the post heading alludes to the $80 strike price plus the $12.00 sale price.  This was the first option bought and sold for the Common Cents Portfolio, so I'd like to review my two strategies for trading around my position: options vs. regular shares.

On April 29, Common Cents purchased an $11.00 call option.  I will assume RH was @ $88.50 (it ranged between $87.5 and $90.7 that day) at that time and that I purchased my usual lot at that price. Typically, I would need to earn 8% on my typical total purchase amount (i.e. share price multiplied by number of shares) before I would be willing to sell for a profit.  That means that RH would have to increase to a price of $95.60 before I would sell.  However, to earn an equal return in total dollars as the stock purchase option, I bought an $11.00 call option and sold it for $12.00.  When my option hit $12.00, RH share price was at $91.50, or an increase of 3.4% from the original $88.50 price.

In summary, when trading options, I was able to get an equal return in total dollars with a 3.4% increase in share price relative to an 8% increase in share price for the stock purchase option.  Pretty good.  The flip side is that owning the option increased the volatility of my portfolio as a whole.  It was great when the option increased in value, but it was also tough to watch when it decreased.

The strategy of purchasing an option with an exercise date well over a month into the future (i.e. June 19 call purchased on April 29), and a strike price well below the current share price (i.e. $80 strike vs. $88.50 share price), seemed to be a conservative approach.  I will look to make a similar trade when RH's share price decreases below $90 again.