Sanrith Descartes
Von Clippowicz
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Implied volatility gives me a chubby which is why I prefer the sell side of the trade.
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Investing General Discussion
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Sanrith Descartes
Von Clippowicz
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How many shares do you have? The $22.50 calls are selling for over $2 expiring on 12/18. I expect a jump up on the vote and then profit taking afterwards. If you have shares in groups of 100 it might be a better play than just a trailing stop. Especially if you drop a strangle and sell puts the same expiry at $12.50 strike. They are running abut 80 cents. As long as it stays between 12.50 and 22.50 you make like $3 a share and keep the stock.
Fogel
Mr. Poopybutthole
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Sanrith Descartes
Von Clippowicz
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HYLN just called for the warrants to be exercised. good long term as they expect the company to move higher. bad for dilution as the stock tanked 17% this morning.
Fogel
Mr. Poopybutthole
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So what's the play here then? I sold puts this morning on VLDR and PSTH as well
Sanrith Descartes
Von Clippowicz
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tomorrow. I think the 22.5 strike is a good deal. worst case you get exercised and make 24.50 a share. Yeah maybe it rockets up into the 30s but you can always roll it out and up or just be content making the profit.
Sanrith Descartes
Von Clippowicz
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Sanrith Descartes
Von Clippowicz
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I wrote the $22.50 on PSTH. This last 2 day push higher is just hopium on an announcement. If we dont get a merger target in the next week I could see it drift back down into the 23's. I will definitely take more at 22.50.
VLDR is a tough call. it was the one I was least certain about. Still got 3 weeks though which is a century in SPAC time.
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Sanrith Descartes
Von Clippowicz
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I dont advise playing this too tight. I am writing the $15 strike. I think its got a floor around $17.
TJT
Mr. Poopybutthole
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PLTR will return. They're being publicly short squeezed right now and for some reason that isn't illegal to do. Buy on the way down I guess?
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LachiusTZ
Rogue Deathwalker Box
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Sanrith Descartes
To do covered calls, sell to open for how many you want to risk and proceeds are the amount you make if it does not sell?
Dont want to do something really retarded and sell 4000$ worth of stocks for 158$. Lol
Blazin
Creative Title
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To do covered calls, sell to open for how many you want to risk and proceeds are the amount you make if it does not sell?
Dont want to do something really retarded and sell 4000$ worth of stocks for 158$. Lol
Not being mean, but based on your question DO NOT do anything until you understand this better, which I realize it what you are trying to do here.
It's 1 contract for each 100 shares you own. You can't sell covered calls on a position unless you own at least 100 shares. The Strike is the price you are agreeing to sell the stock at if it trades at that price or higher at expiration. You keep the premium collected either way.
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Fogel
Mr. Poopybutthole
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To do covered calls, sell to open for how many you want to risk and proceeds are the amount you make if it does not sell?
Dont want to do something really retarded and sell 4000$ worth of stocks for 158$. Lol
Yes, you sell to open to do covered calls.
If you own 100 shares of apple, you can sell one covered call contract, since all options contracts are in batches of 100. If apple is currently trading at 118$, and you sell a call for 120$, if apply closes above 120 before the call expires, you shares may be called away for 120$
If the premium for the call you sold was 2.00 you'll receive 200$ in premium (2.00 times 100 shares), and whether the option expires or your shares get called away, you keep the 200$
If you want my advice, I'd start selling puts on cheaper stocks. I practiced on stuff in the 10-20$ range so each option contract was only around a 2000$ total.
Sanrith Descartes
Von Clippowicz
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What the others above me said. The only thing to add is their probably wont be a "sell to open covered call" line. It will just be "sell to open" and the system understands that since you hold the equity it is a covered call. Note: while the option is open you cannot sell that stock since it is being held as collateral.
I am going to stress again please spend time learning about options before investing in them. Please. I know men like to not bother reading directions and just start putting shit together but in this case, you really want to understand this stuff. Make practice trades on paper and see how you do. Figure out what went right and what went wrong. After I screwed the pooch on BA options early in the year, I spent a couple of months doing just that. Fake options trades with fake money. Learn with monopoly money.
It doesnt get discussed enough here but if you are selling covered calls, make sure you also understand the concept and mechanics of rolling options.
I am going to stress again please spend time learning about options before investing in them. Please. I know men like to not bother reading directions and just start putting shit together but in this case, you really want to understand this stuff. Make practice trades on paper and see how you do. Figure out what went right and what went wrong. After I screwed the pooch on BA options early in the year, I spent a couple of months doing just that. Fake options trades with fake money. Learn with monopoly money.
It doesnt get discussed enough here but if you are selling covered calls, make sure you also understand the concept and mechanics of rolling options.
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LachiusTZ
Rogue Deathwalker Box
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Yeah that's what was fucking with me.
I've done enough options to be comfortable with them, and have done ok so far.
Like I said, didn't want to sell 200 shares of MP for 158$. Lol
I understand the concept of rolling options, but not mechanics.
I've got enough volume I'm going to start working these and see if I can milk some %s
Sanrith Descartes
Von Clippowicz
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So here is the chain:
If it were me I would avoid the Jan expiry and focus on the 12/18. You could sell the calls on the $25 strike for $1.30 bid. Assuming you have two hundred shares, you would/could sell "2" contracts. Each contract is 100 shares. So you would instantly receive the premium of $1.30 * 100 = $130 per contract. Assuming the price stays under $25 the contracts expire and you keep the $130 per contract. If you get assigned then you would sell the stock at $25 no matter the actual price. Being covered means you dont have to go out and buy the shares to honor the contract since you already own them. Effective, you would make $25 + $1.30 = $26.30 per share (or $2630 per contract) if assigned.
Selling the $30 strike is the same except plug in the different values (0.65 current bid premium and $30 per share if assigned). LEss premium but obviously much less risk of assignment.
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