All Questions
18 questions
1
vote
2
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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
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
-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
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
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