Questions tagged [covered-call]
74 questions
13
votes
4 answers
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 buy to close.
On Monday, I found out the option was…
fundmakesell
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12
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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 price down quite a bit. It's sort of like getting…
Matthew
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8
votes
4 answers
Am I doing the math for this covered call/long put strategy correctly? What risks do I run with this strategy?
In this trade, I write an in-the-money covered call and buy an in-the-money put (as an example) on GM, expiring in September 2014. The call premium is $10.02 with a strike of $26, and the put premium is $4.17 for a strike of $37. GM's share price is…
Michael A
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7
votes
1 answer
Premium classification when selling covered calls in a traditional IRA?
If I sell covered calls within a traditional IRA, then is the premium considered a contribution or a capital gain and can I withdraw that money?
user3429
6
votes
1 answer
Can closing a covered call and opening a new covered call trigger a wash sale?
In Jan 2019, I bought 200 QQQ (ETF) at about $160 and also wrote two covered calls for June 2019 at 170 (higher than the last day price) netting a small premium. Now QQQ is at about 185 so it will be assigned to me unless I cover it.
I am thinking…
riya
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5
votes
3 answers
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 past 10.00. I fully expected my position to be…
Jane Wilkie
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5
votes
2 answers
Brokerage Fees for Covered Call Options
I have been doing some research and am thinking of selling a Covered Call on a stock I currently own and am planning on holding long term. I would like to make an Out-of-the-Money Covered Call (OTM CC), which from my understanding limits my…
Greg Bray
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4
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1 answer
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
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 $7.75 a share ($775.00 invested)
- I then sell a call…
Jane Wilkie
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4
votes
3 answers
Could I miss out on a spike if I sold covered call options?
I am new to options.
I have a long position in unrealized loss, which I believe will eventually return to break-even, but I do not know when.
It is my intention to make sure I close the position without a loss, while extracting some liquidity out of…
user162450
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4
votes
2 answers
Rules for Broker Behavior with Covered Calls
When selling covered calls, there are a couple of things a broker could do if the stock has a sharp increase. Here's an example:
Buy Stock: $100
Sell Call $120@1month: $1
Two days later, the stock spikes up to $120 and my call now costs $22. The…
Benjamin
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3
votes
1 answer
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 to $120 and the option is exercised, will my share…
fileyfood500
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3
votes
5 answers
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 you have to sell the underlying shares at the…
k31453
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3
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4 answers
What are your experiences with 'self directed' 401ks?
Some background:
have no plans to leave current company anytime soon, so (short of borrowing against my 401k balance to invest outside the 401k) I can't get the funds out
want to max out my 401k contributions as my company very generously matches…
Jon S
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3
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1 answer
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 underlying.
So how does one sell a covered call on…
Victor123
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