I would like to know, if it is possible or likely, that an "out the money" share buy order would be skipped, when a stock prise rises very rapidly.
I have 466 shares of tesla. I have a high conviction and plan on holding for a long time. From time to time, I buy more, when I think the stock is grossly undervalued. Sometimes the stock drops sharply after I buy, but I don't mind because I have a very high price target for 2025 to 2030.
I would now like to leverage this situation into income. My plan is to sell covered calls for say 50% of the shares. However, what I would absolutely hate is if the calls I sell, get executed, and I lose my shares all of a sudden.
So, I am thinking of putting in a buy order, at the strike price of the option, to prevent losing my shares. If the stock suddenly rises a lot, the options would get exercised, but at the same time, my buy order for the same number of shares would be exercised, so I would not lose out on the run-up. Of course, I run the risk of buying more shares, after which the stock sharply drops again, but as mentioned, I am OK with this.
Now my question is, if my order can somehow be skipped, while the price rises for some reason? I know that stop losses can sometimes be skipped, but does that also apply to buy orders? And finally, does it make a difference if my out the money buy order is market or limited for this purpose? Or perhaps there is a different tool I should use instead of what I describe here? Also do buy orders get deleted by the system every now and again? Do I need to resubmit them periodically? I am a customer of IB and have a pro account.