Tuesday, September 13th, 2016

Strategies for selling open covered calls?

seems difficult to make money with him about the people who are more optimistic. For example, I have a stock that I am optimistic now priced around 3. 50. There were three available options contracts exercise price of 2. 5 5. 0 and 7. 5. if I sell show 2. May i get a premium option $ 94 instantly, but if the contract is exercised going to lose money on the sale since she bought at around 3. 25. if I sell 5. 0-i only have a premium of $ 5. is the sale of the two. 5 option basically a ‘short’ of the population so if the tanks to $ 2 i get a benefit? my confusion is that the calls (or puts) can be long or short depending on the option contract to enter? my account only allows one level of options trading at the moment so how I can take advantage of opportunities in options Portfolio until my account is approved for Level 2 and 3 trading options? thanks

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3 Responses to “Strategies for selling open covered calls?”
  1. Oh Boy! says:

    Don’t be trying to sell covered calls on a $3.50 stock. The call just can’t be worth enough to make it profitable, as you’ve just figured out.

  2. dos_fossil says:

    Covered call strategy is good for the longer term outlook. Did you know this when you chose this strategy, stock and seeing the light volume it trades?
    What you could do is go out minimum two months and maybe into the leaps and sell the $5 call and see what you can get for it. Run the numbers, you will probably be ok.

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