Thanks, good read! your explanation on options really much better than those i see on Youtube (Or probably those channels i clicked in are craps to begin with). The Margin thing, i really need to take a look. Does it means when you're on Margin account if you purchased the options at $1k (PLTR $10 x 100 shares), only portion of your cash got locked in by the options and not the entire $1k? so you have cash to buy other stocks?

Then the Margin 1.83% interest only kicked in when your portfolio cash becomes Negative due to the stock you hold in portfolio is making losses? Please don't bash me

Just curious, will anyone Sell Put ATM? I noticed the premium for ATM had more to cover the strike price (very small margin maybe +0.1/share). In what scenario will a person Sell Puts ATM?

Edited: I actually answered my own question, so i decided to ask another question.

Does rolling an options charge additional commission every time you roll?

This post has been edited by Lon3Rang3r00: Apr 27 2022, 11:40 PM

Mind to ask? Are you using IBKR for options. If yes, is it normal to see Rolling Options feature shows "NA" when you click calculate? Try play around this last night, no matter which i click, when Buy/Sell orders i can preview the calculate, but it shows NA when i use Rolling option.

2) Is it a bad habit to monitor the option everyday? I found myself keep looking at the stock price every now and then to see whether I'm closed to ITM and re-think should i roll down/out. (Or because this is just psychology problem as this is the first time i'm trying out options).

Q: Eventually you'll get assigned for the stocks you want while doing options.

Assuming the assigned stock got plummet for 30% below your Put price after assigned, would you sell Covered call on the price you got for the stock or you'll adjust accordingly (nearer to ITM and get more premium and find the balance that you'll still get profit without losing $$)

Another question is. If you know that the stock is currently in a bearish situation but you're bullish on the stock. How do you see selling a Put Options with a Limit Order *and* set to *Good till Cancel*.

Example: Selling a put options on PLTR with a strike price $10 when the stock price is at $12 (just example) and the options premium by end of the week is only at 0.04. So, is it good that if I were to set a Sell Put Options with a limit price of 0.10 (This is the premium) and i set *Good till Cancel*.

For the example above, can i assumed that if the Order got executed, i will get a higher premium // If the order did not reach the limit price i set, the order will not be processed then nothing happen

This post has been edited by Lon3Rang3r00: May 3 2022, 01:26 PM

Done update, should be readable now? Sorry, cause the option thing still very new to me so i not sure how to phrase it

So, you paid the premium to hold the 100 shares instead of paying the actual 100 shares price, and then selling a covered call on it.... it sounds like a glitch to me since you don't actually owned the shares and yet still can sell it off it sounds macam trading the paper contract instead of shares.

For the long call options that expiry after 2 years, assuming if the shares price went up then you will get capital gains if exercised the calls options. If the shares price went down, you can abandon it and forfeit the premium you paid. why it sounds like it doesn't have much of a flaws.



I always got mix up with buying an options, so write it down here in case anyone may need it

Selling a Put Options = You get the options premium in exchange for buying shares at a strike price on or before the expiration date.
Selling a Call Options = You get the options premium in exchange for selling shares at a strike price on or before the expiration date.

Buying a Put Options = You pay the options premium in exchange for the right to SELL shares at a strike price on or before the expiration date.
Buying a Call Options = You pay the options premium in exchange for the right to BUY shares at a strike price on or before the expiration date.




This post has been edited by Lon3Rang3r00: May 4 2022, 08:16 AM

True, lower strike price and also lesser premium to pay for ITM compare to all time high. Hmm , Poor Man's Covered Call look to me like setting a time target for yourself to earn enough premium to cover the amount you paid for buying the long call. Anything after the breakeven is profit. The name Poor Man, just so poor people can buy stock that they can't afford just so they can do covered calls

Noticed this on Google stocks, could that means these people just wanna sell Covered call and don't bother about capitalization gain?

Still don't get it for Poor Man's Covered call (Please bear with me)

After you buy the LEAPs that expired in two years time, then you move on to selling a covered calls.

So my question
1) What happens if your covered calls got exercise? Did the initial "LEAPs options that you purchased" also got exercised?
&
2) What happens if your covered calls expired? Continue to sell covered calls?

3) Assume that everything went well, is the LEAPs automatic exercised or you need to manual intervene to exercise

Each contract = 100 shares = 0.10 x 100 = $10.
10 contracts = you have to hold 1000 shares of AAPL before you can sell a covered calls. I'll be surprised if you willing to risk so much for so little premium.

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.

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.

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 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

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

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.

It's funny that sometime i felt that whatever i posted, the market will go oppose me. Still, doesn't stop me to continue research and try out. I sell CC on PLTR at the strike of $8.5 on 24-May which at the time is trading around $7.6 didn't expect the deal which boosted their stock, too late to close the option just now, but nevertheless I will Sell Puts to buy it back at $8.5 next week.

Maybe I'll free up my $$ by buying Long Call instead and do PMCC or just totally ignore and let the stock grow and exercised the Call options when i remember, while using the $$ to buy other growth stocks to accumulate shares.

I have a few questions For PMCC

PMCC = which you are Buying a LONG deep ITM Call with around 180 DTE. Then selling a SHORT OTM Call with DTE <60 or whichever DTE you feel good about it.

Let's take AMD for example, Reference: AMD inc Yahoo Options Chart
- Buy Long Calls with the strike price $90 expiry on 16-December with the premium of $26.16.
- Sell Short Calls against it with the strike price of $120 expiry on 19-August with the premium of $5.75.

Questions:-
1) The total amount that I need to pay for the Buying the Long Call is $2616. Can i assume the breakeven price for this options excluded the Selling Calls is $116.16? (26.16+90.00). Meaning if AMD rises above $130, I'll be making profit if i exercised the call options anytime before Expiry and sell it immediately? (Provided i have the upfront cash to buy the entire share at $9000)

2) After i sell the calls for $575, my total cost for this PMCC is $2051. Next is to wait till 19-August, if it expired worthless then only i can sell another calls?
2a) What if the Short Call got exercised? Since I'm using IBKR, does the initial Long Call exercised automatically? or IBKR will treated as "Naked Calls" and ask me to cough out 100 AMD shares?
2b) If the short call got exercised, how much did i lost in total?

3) If i don't have enough cash to exercise the long call (buying the 100 shares before the long call expired), I'll have to sell a short calls to ensure it got called away before the expiry date?

Still a toddler here

Still taking baby steps at a time, always felt like just touching the surface of it... wondering why it's so hard for me to understand PMCC...

After i posted my previous, i go ahead and watch couple more of videos explaining on PMCC, and you probably guessed it right ~ i still have few underlying question that I wonder why most video don't talk about it. Firstly, I found that PMCC is just a term for a variant of Diagonal Spread or to be specified Calendar Spread (I'm dumbass). I also realized that buying the Long Call doesn't mean you own the 100 shares of the stock, you just own the "Options" so when something happen with your Short Calls falls ITM and got assigned, the brokerage will do the stupid right thing and liquidate any asset that you're holding except the Long Call Options, as most brokerage did not see the option as your "Asset".

So then, most videos discuss the Pros and Cons about using PMCC where the maximum risk only the amount of the money you paid for the premium on the initial Long Call + any subsequent premium if you roll or close your Short Call options at a loss. I wonder why none of the video that i watched mention about what to do with the Initial Long Call position? Is it i missing something here?

From my understanding, if you "Buy" to open a Call position and didn't do anything about it, the "Buy" option will reach it expiry date and expired worthless. And from those video i watched, I don't see how you can continue to sell a short call until it can cover the entire premium for the initial long call and still make a profit from it. So in the end i still have to cough out $9000 to fulfil the Long buy Option at expiry? (i really thing i missing something here, hope anyone can pointed it out)

p/s: Pretty sure all the sifu out there are planning to gang me on this... :