I currently own a little over 500 shares of a stock which represents a hefty on-paper loss for me. I don't want to liquidate the position. I think that long term, the stock may come back up as in the past year it has gone from super horrible. There might be some speculation and sans-the market up and down spikes, it seems on track to go up, but not enough for me to make a profit.
I don't trade options in general, but I think this would be a good place to start. I was thinking I would sell the call for a higher price to earn the premium. I could then part with the share if the stock was in the money, but I don't think it will quite get to the strike price in the next few months.
My questions are therefore, is this a reasonable strategy (collect the premium now, take a risk that I may have to sell, but still I'd be selling at less of a loss than if I sold today)? And, how exactly does this work with an online broker (TDA in this case). Do I just put in the order correctly, and if the strike hits before expiration they grab the shares out of my portfolio, if not I keep my shares? I want to make sure I am using the right strategy and exactly how it will work once executed. T