I recently entered the options trading market to start generating a passive income on stocks I intend to keep for the foreseeable future.
I entered a position on a pharma play with 100 stocks @ $2.70 avg price and decided to sell a covered call with a $0.10 premium (strike price of $3.00). This option was bought, thereby giving me $10.
The price then fell to $2.65, so I thought my total p/l would be 0.05c lost per share (-$5) + premium I received for the call (+$10) making the total +$5. Is this math correct? My brokerage account states that my option has a total return of zero, and I am not sure if this means the premium has somehow been taken away (Do the greeks affect premiums after someone has bought my option?), or if it just means that my option has no intrinsic value (I cannot sell my option to another bidder)... (sorry if this part is confusing, this is where I kind of got lost).
Also would I be correct in stating my total possible p/l is $40 ($10 from option sell, and +$30 if the stock price is at or above $3)?
If this is true, am I right in assuming that as long as I am long on a security, and always have a set exit price in mind, then there is no downside to selling covered calls? It seems like that is too good to be true...and the stock market was not made to win so easily...right?