*douple posted

This post has been edited by Sherman Kong: May 5 2022, 05:47 PM

Thanks for the information. I will research more about options before putting real money into it. Currently still using demo account to trade.

Dang, I'm using my own money to learn (cause I believe no pain no gain), I'm currently practicing wheel strategy on PLTR. I also plan to buy LEAPs on SoFi, if two years later the company doing well, I'll exercise the option, seems a good buy now.

Please don't waste money on SoFi. Better for you to buy upstart or palantir.

When will the sell put/call options exercised upon expired? Mine expired yesterday and I thought it will exercised after market closed. But this morning it still shows as Options.

Maybe it takes awhile? Once expired it wouldn't even be listed in your open positions

Are you sure it 3xourrd worthless? You need to consider after hours trading.. If during normal hours, it is in the money, it will get assigned automatically.
If after trading hours., The buyer have to manually assign.

Anyway if you are using interactive broker, you can only see it tonight around 10pm. Saturday is maintenance day for them.

Yeah, I avoid SOFI and LEAP. Use Option for trading only, no long term hold

for IB, usually reflect on Sunday. Most Saturdays, maintenance time

PLTR put 10.50, I thought it will exercised immediately after market closed haha. Thanks, I'll be checking after tomorrow. Then start sell Covered Calls next week, looking at selling CC on $10.50 strike price. I don't think the earning will have much impact during this down trend. It may even go lower if they didnt hit the target.

I usually checked in Saturday.

I Sell CC PLTR with Strike price of $8.5 with the expiry date 13-May-2022.
Just now i checked and realize PLTR already up to $8.19
Now check if I able to close the position for $2 premium.

Rather to lose the Premium than to sell my PLTR at $2 loses/share

This post has been edited by Lon3Rang3r00: May 13 2022, 11:17 PM

at least if you still kept your shares, can continue to sell covered calls for another day

How much you sold your call for?
Looks like your call strike price is below your average price which means your will be making a loss if the stock gets called away.

I wonder in this current Bearish market, will it be good selling CC ATM/weekly then IF got assigned, Sell CCP AT or below the CC's Strike Price on the following week.

For the maximum loss, I'll assume the lost is just your Stocks got called away and you can't get it back + the difference between the average price and the CC Strike price (If the Average Price is higher than the strike price)

This post has been edited by Lon3Rang3r00: May 26 2022, 08:36 AM

why do you choose to sell covered call in such a way that if it gets called away, you actually incur a nett loss? should be setup in such a way that you still earn some limited profit as stock price rose no?

This post has been edited by Medufsaid: May 26 2022, 09:32 AM

Wrong. In a down market, it's more profitable to sell covers put. Selling covered calls give you less premium. Cause simple supply and demand. More people buying put to hedge. Hence increase in price.

By selling calls during down market is market rebounded a lot. Hence you get called away.

I do both. Sell puts and calls on stocks I already own.
You need to make sure it's far otm so it won't get assigned even if market rebound.
Only like 4x I have been called away. Otherwise expired worthless.
I just start doing covered puts on it at the price it was called away.

There are other strategies where you say buy a call and sell a call. I think it's call debut spread.

Higher Premium? It's a bear market now...

Given the scenario as below.
Assumed my average acquisition price for Company ABC is $100 for 100 shares. Currently the stock is trading at $80.
Instead of earning Premium out of the money, I choose to sell Covered Call at $80 strike price and the stock got called away at the end of the week.
The following week, I start to sell Cash Covered Puts with the strike price of $80 or below and wait the stock to get assigned back to me.

By doing the above (Selling Covered Calls and Cash Covered Puts using the same Strike price) and IF everything went smoothly, It nett off since the stock got called away and reassign back to me at the same strike price, and i keep the high Premiums that from both sales options.

And IF i did not get assigned back after the Covered Calls, then the maximum loss will be ($2000 - the premium i got for both sell options), but i still can continue to sell Cash Covered Puts in hope to get assign back.

Unless you really hurting for liquidity, else no need to sell at a loss.

If I were you and liquidity is not an issue, to reduce the avg cost of ABC:
I will sell put at say $60 at $0.5 premium and sell call at say $85 at say $0.3 premium.

If both goes thru and expired worthless, I cut down my avg cost of ABC to $99.2

This is provided you have fund to cover for the sell Put. Slowly grind till you recover your loss.
It is painful and slow to do this. I am also doing this to recover. That's why we need to be mindful on our entry price.

This post has been edited by Toku: May 26 2022, 02:10 PM

if i encounter a drastic bear market, I'll incur losses (due to the dropped value of my stocks in CC), then I need to cough up the money to honour the puts i sold. so lose $$$ by 2x?

This post has been edited by Medufsaid: May 26 2022, 02:21 PM