4

If you place a limit order to buy and price gaps through your limit price, you will not get to buy additional shares. If you place a conditional order that becomes a market order if a certain price is reached then you'll buy shares but who knows what the price might be? For example, with TSLA at $700, you sell an $800 covered call and you place an order to ...


2

Covered calls have an asymmetric risk/reward and your example depicts that. You bear all of the downside risk while having the potential for a limited profit. AFAIC, this strategy is appropriate for a stock that you're willing to hold but have a target sell price. If taking on a new position just for the sake of the premium, AFAIC, there are safer ways to ...


2

Now, what stops me from putting a limit buy order at the strike price of the options I have sold. Wouldn't this provide me the ability to retain the shares while selling options? If you place a limit buy order at the strike price when the strike price is still much higher than the current stock price, the limit buy order will execute immediately at the ...


2

There's no way to accurately hedge a stock that doesn't offer options. There are some things that you can do but there's no guarantee that they will be effective and they could even make things worse: You could use the options of a similar stock or even short some stock (pairs trading which can be risky) You could use the options of SPDR ETF if you are ...


1

If this is a margin account, you can buy the short call to close and then sell the stock, incurring no margin charges. However, that's not the best way to close the position, regardless of the type of account involved. A Buy/Write order contains stock and an option. It can be done in a cash or a margin account. For establishing a covered call (assuming ...


1

When you sell a covered call, you receive a cash credit in the amount of the premium times 100 less any commissions paid and/or fees. Your account will show a short call with a debit balance equal to the current price of the call. While the short call is open, its debit balance will fluctuate, rising if the call's price increases and dropping if the call's ...


1

You only sell covers if "you're kind of OK with getting out at a profit" This is the exact opposite of your situation! Again, you've literally described "when you would never, ever" sell covered calls. So don't do that, and forget the idea. I suggest you do what Bob.B. says in his final paragraph. I don't, like, understand it but I'd ...


Only top voted, non community-wiki answers of a minimum length are eligible