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| Topic | Stock Topic 13 |
| CoolCly 01/04/21 12:31:17 PM #284: | Oh good topic, I was trying to understand covered calls this weekend Does 1 covered call = 100 shares? My broker lists this as a multi leg option - I need to buy 100 shares and then can sell the call option. If I just own the 100 shares to begin with, am I just able to sell the covered call directly with the shares I have? Do you expect the call to be exercised immediately upon hitting the strike price, or does it usually not happen until the price is a bit higher to be more "in the money"? I see that a lot of calls being sold are at or below the current price.... If I'm understanding the theory right, it seems that the primary benefit is when I'm just holding something like AMD for the long term, but don't think it's going to rise in the next few weeks, I can sell a call for a few dollars more than current price and expect the shares not to sell and to keep the premium, and worst case my shares just sell at a gain from the current price, and I harvest the gain I've already made holding AMD till now anyways. I'd need to own 100 shares though which is way more than I have. I guess I need to be a big time investor to enjoy these kinds of things. I suppose plays to capitalize on things like FUBO could work too... if you are right that this is near the bottom. I'm assuming you think that because this is the price it was at before it's December run? --- The batman villians all seem to be one big joke that batman refuses to laugh at - SantaRPG ... Copied to Clipboard! |
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