All Questions
Tagged with covered-call call-options
30 questions
0
votes
2
answers
501
views
Suggestion to recover from a bad naked call
I sold a Jan 2026 CRWD $140 Call, and now the price skyrocket to 235 (I know, bad move)
How do one usually get out of this situation?
Many thanks.
- 3
1
vote
2
answers
296
views
What happens to the 100 shares if someone "sell to close" their call option position?
Allow me to explain.
Let's say I sell 1 covered call and receive the premium. When I sell a call, I am assuming that someone on the other end would have bought my call (say Nora).
If the share price ...
- 133
1
vote
1
answer
201
views
Covered call buy-to-close using sale of underlying?
If I write a covered call, my account will be long the underlying and short a call. Say I withdraw the premium from my brokerage account and spend it, invest it elsewhere, etc.
If I want to later sell ...
0
votes
1
answer
971
views
How to manage covered call position when stock price goes down
So let's say you have a position like this
bought 100 shares of XYZ at $50
sold 1 covered call at $55 strike, received a premium of $2
stock price goes down to $35
now premiums for strike prices ...
- 11
0
votes
4
answers
146
views
Selling Covered Calls p/l
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 ...
1
vote
2
answers
2k
views
Writing call options, when do I receive premium?
I own 100 shares of a stock and I would like to get into writing covered calls.
I'm just curious:
If I write a contract, do I immediately receive payment for it from my broker? Or do I have to wait ...
- 15
0
votes
1
answer
317
views
Should I sell to open or sell to close
If I have inherited stocks through employer provided stocks (RSU). I haven't ever placed a "Buy to open" trade.
If I want to sell a CALL option and place a trade (say current stock price is $...
- 103
0
votes
1
answer
558
views
How not to pay taxes on covered call
I bought 100 shares of ESPO four months ago for $50 and sold a September 18 $62 covered call at Robinhood.
With the stock trading at $61.50, I think that it's likely that I will be assigned. I will ...
- 1
0
votes
1
answer
132
views
Help understanding Collar strategy
Could someone explain the drawbacks of this option collar strategy on PPL? It looks to me that there is minimum risk. I use Robinhood for my trades and pay no commissions/fees.
Buy 100 shares for $...
- 59
0
votes
1
answer
110
views
What to do with a call I sold
I own 300 shares of NCLH, I sold a call last Monday with strike price of $16 when the stock was at $15.8 for a premium of $115 (for the 3 calls). The Call expires tomorrow and I don't know what I have ...
- 59
2
votes
0
answers
83
views
Can companies raise cash by selling covered call options on their treasury stock?
Suppose a company has lots of treasury shares. Can it raise cash by selling call options covered by the treasury stock? If the stock price ends below the strike price of the calls sold, then the ...
- 17.2k
13
votes
4
answers
12k
views
Why do people exercise call options at a loss?
I sold some call options for $2.55 premium at strike price of $130. At expiration, the market price was $130.55. I thought the option was not deep in the money and at a loss of $2, hence I didn't ...
- 139
-2
votes
3
answers
1k
views
Selling covered calls does not make sense
I have one bitcoin and was thinking about selling call while owning the asset.
However after some pondering I came to the conclusion that if price drops then the strategy can only be performed one ...
- 107
2
votes
1
answer
321
views
How to reduce margin requirement when shorting calls?
When I naked-call (short) cash-settlement options, like VIX, the margin requirement is very high.
I tried some spread strategies to protect (e.g., buy same-expiration call at a higher strike), but ...
- 39
1
vote
3
answers
325
views
How to buy a contract for S&P 500 index?
I am researching writing covered calls on S&P500 index. So in order to sell covered call I need to buy a contract for S&P500 index. I've never traded indexes. What exactly I will be buying (...
- 111
1
vote
1
answer
858
views
Approach to roll down a Covered Call
If I sell a covered call and the stock declines some time before expiry, what would be a strategic approach to roll down the call to protect the downside, or are there any other approach to do it? Do ...
user11530
0
votes
1
answer
2k
views
Deep in the money Covered Calls with high premiums
Take a look at following option chain, it's for some company in Indian markets,
I intend to do a covered call on the stock but I would want a little extra downside protection at the cost of little ...
user11530
2
votes
1
answer
5k
views
Robinhood covered calls
If i buy 1 call option and then sell 1 call option. Is that classified as covered? I don't actually own the shares, i just own an option to buy them. Robinhood allows me to do this even though i dont ...
- 213
3
votes
1
answer
877
views
Selling Covered Calls, will online broker sell shares automatically?
Let's say I own a share of a company at $100, and I sell a call option for this company for $5 with a 6 month expiration, and a strike price of $110 (all arbitrary numbers). If the share price rises ...
- 165
1
vote
2
answers
758
views
Borrowing share with a covered call for short?
I was wondering if I could increase the premium from my long term hold by providing them to my broker as a short sale stocks?
My main question is that are there any implication on the fact that I ...
- 113
3
votes
5
answers
5k
views
Why naked call writing is risky compare to Covered call?
I know that with a covered call you own the underlying and sell a call and with a naked call you don't own the underlying. Either way, if the underlying finishes in-the-money, you are assigned and ...
- 79
1
vote
1
answer
2k
views
Accounting Entry for Selling a Covered Call
I recently started looking at trading options and started with the time honored tradition of selling a covered call. What I don't understand now is what my trading platform (TD Ameritrade) balances ...
- 171
0
votes
2
answers
145
views
Options tax treatment
Suppose I want to write a covered call on my 100 shares of AAPL that I have held for over a year.
If I sell a covered call of AAPL 125 in December 2015 with a June 2016 expiration, and the premium on ...
3
votes
1
answer
1k
views
Sell covered call on an index option
When I trade an index option (SPX), there is no actual trading going on in the underlying (as opposed to SPY).
But some option strategies (like covered call) by definition require a position in the ...
- 16.1k
2
votes
1
answer
102
views
Can I get an assignment notice as soon as I sell a covered call
If I sell an American style ITM covered call, then in theory, can I get an assignment notice as soon as I have sold the call, since the counterparty can opt for early exercise? Does this ever happen ...
- 16.1k
2
votes
2
answers
1k
views
how do I calculate rate of return on call options that are spread
I want to do a leap spread on an existing covered call option. How do I calculate the rate of return to determine if it's worth doing the leap spread?
- 21
4
votes
1
answer
262
views
How can I sell INTEL covered calls?
As shown in this picture, how do I execute the strategy highlighted in yellow? I am based in the UK.
Source: http://seekingalpha.com/article/274231-intel-dividend-champion-in-the-making (10/6/11)
user2654
4
votes
2
answers
1k
views
Calculating profits on a covered call. What method do you use?
Hey guys. I was having a discussion with someone about calculating profits on covered calls and I thought I'd ask the community's advice on which way is correct.
I buy....
- 100 shares of XYZ at $7....
- 439
5
votes
3
answers
3k
views
Covered calls: How to handle this trade?
I bought XNPT (Xenoport) a couple of weeks ago at 6.93
I turned right around and sold the Apr 16 call. $8.00 strike and collected 1.50 in premium.
Today I get a great surprise that XNPT has rocketed ...
- 439
12
votes
4
answers
980
views
Covered Call Writing - What affects the price of the options?
A little while ago, I bought $800 worth of stocks and sold about $200 worth in call options against the stock. I think it was 200 shares and 2 contracts (so my options weren't naked).
That takes the ...
- 221