Talon2DSO said:

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You guys watching ZOM and GTXO???

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what's going on with GTXO? i don't see anything peculiar

cjo03 said:

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Talon2DSO said:

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You guys watching ZOM and GTXO???

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what's going on with GTXO? i don't see anything peculiar

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They launched an in home antibody test kit for COVID last week.

Remember markets close at noon today

QD - have we just seen the double bottom and about to see a rise?

txaggie_08 said:

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QD - have we just seen the double bottom and about to see a rise?

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God I hope so, I'm in a pit on QD

ajolly said:

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txaggie_08 said:

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QD - have we just seen the double bottom and about to see a rise?

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God I hope so, I'm in a pit on QD

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I'm down a little over 20% right now. It's my biggest loser, taking the place of GOCO since GOCO has finally shown some life the past couple weeks.

I seem to pick the worst stocks to follow in this thread. QD and GOCO have eaten up a good percentage of my play account and have done nothing for me as of yet.

You've got it, but you can also buy them back, roll them out, roll them up....there are options on options. Ha!

third coast.. said:

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$30,000 Millionaire said:

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Agfootball10 said:

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Are y'all gonna sell MBIO? I got in at 3.10 and am thinking of getting rid of it and waiting for another dip.

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no way bro. Sell a $5 covered call if you are antsy for some profit.

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so on this, what is the risk here? There has to be some amount of risk in selling covered calls, right? this is my first real look at it and the only downside i see is if it goes boom and you get called out and miss out on those profits from going over $5.45 in this example. If you are in at say $3, then you made the premium from selling the calls and the profit from being called out. when i looked at it last night, it would have equaled $245 per contract. This could bite you in the ass i guess on something that takes off for the moon, but that seems to be more of a rare thing.

Am I missing something here? I know this is beginner level for the vast majority of this thread, but that just seems too foolproof.

I appreciate the info from you or anyone else who feels like answering.

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There are only 2 risks and one isn't really a risk.

1. The shares are 'tied' up until expiration meaning you cannot trade those shares if the stock goes down to get out. The only way to get out of that is to buy back the covered calls then trade the shares. Or roll them out as McInnis shared above.

2. The second isn't really a risk but potential lost opportunity if you are called out and the share price is way above the strike.

If you are long on the stock then selling covered calls is a great way to lower your cost basis and pick up cash now to use now. Generally I try and pick strikes in this scenario that I do not believe the stock will make it to and if so I don't care because the premium I was paid + the strike price is a solid return.

third coast.. said:

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$30,000 Millionaire said:

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Agfootball10 said:

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Are y'all gonna sell MBIO? I got in at 3.10 and am thinking of getting rid of it and waiting for another dip.

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no way bro. Sell a $5 covered call if you are antsy for some profit.

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so on this, what is the risk here? There has to be some amount of risk in selling covered calls, right? this is my first real look at it and the only downside i see is if it goes boom and you get called out and miss out on those profits from going over $5.45 in this example. If you are in at say $3, then you made the premium from selling the calls and the profit from being called out. when i looked at it last night, it would have equaled $245 per contract. This could bite you in the ass i guess on something that takes off for the moon, but that seems to be more of a rare thing.

Am I missing something here? I know this is beginner level for the vast majority of this thread, but that just seems too foolproof.

I appreciate the info from you or anyone else who feels like answering.

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A good example is MGNI - I sold the $7.50 calls when I had a cost of about $5. Potential 50% return in a few months sounded great. Now I just skim over MGNI posts so I don't get frustrated. I did roll calls and change it some, ended up selling all I had in the $15 range. So I can't be mad about profit, but what could of been.....

Might regret it but sold MBIO $7.50 February calls recently and some $5 January calls when it was at $3. That would be about a 100% gain 7 weeks from now for February. I would be doing cart wheels of those get called out even if it shoots to the moon.

If they do not get called out, keep the profit from selling calls and be closer to net free.

What's the general rule of covered call contracts sold to number of shares owned?

CrazyRichAggie said:

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What's the general rule of covered call contracts sold to number of shares owned?

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OA has posted about them and it seems 50% is his standard

third coast.. said:

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Roger, #1 in your scenario i could see being a big issue for day trader types, but like you mentioned if you are long it seems like a great strategy. now for another beginner question, what does roll them out mean. Thanks for the insight and sorry for all the newjack questions

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Basically, you buy back your original call and sell a call usually a further out date/higher strike price. That way you have some more income to offset the price you just paid to buy back the call you sold.

CrazyRichAggie said:

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What's the general rule of covered call contracts sold to number of shares owned?

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If you believe in the stocks long term value (which is why you bought it) then sell covered calls on 50% of your shares. That is the general OA recommendation and also one I have implemented. I have sold covered calls on a larger than 50% share of my position but only when the premium was stupid.

GtownRAB said:

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CrazyRichAggie said:

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What's the general rule of covered call contracts sold to number of shares owned?

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OA has posted about them and it seems 50% is his standard

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So is that 1 contract for every 200 shares owned?

Baba being investigated. Stock fell off a cliff.

third coast.. said:

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So how do yall time when to sell the covered calls or is that not necessarily a timing thing, or do yall look at technicals on that aspect as well. Closer to the strike date and how close it is to being in the money im sure has the largest impact.

For some reason this is the only thread on TA that will not load while im on my work computer so i have only been able to follow it intermittently over its lifespan.

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I look at the premiums being paid and the technical for projecting the rise of the underlying share value. In some cases like $WWR I bought shares and immediately sold the covered calls because the premium was really high for near date expirations. I also in this case sold a strike price to $12.50 vs the lower ones. I received less premium but if called out the reward was a lot more.

CrazyRichAggie said:

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GtownRAB said:

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CrazyRichAggie said:

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What's the general rule of covered call contracts sold to number of shares owned?

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OA has posted about them and it seems 50% is his standard

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So is that 1 contract for every 200 shares owned?

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Yes - like FJ said though, percent could be higher, especially with high premiums. Personally, I follow this thread to learn and play around with a small cash account. If it is a stock a only can sell a few options on, I sell 100% covered calls on it at prices I am ok getting called out. Most likely to rebuy the shares if the price drops.

Another example, for MBIO, I sold roughly half at $5 and the other half at $7.50 for 100% total. Through calls, I have lowered my cost to about $2.90. Getting called out after a few months at either $5 or $7.50 is fine with me.

I am learning also, don't take this advice, more just sharing thoughts. (see above post where I lost out on the MGNI run)

Do you anticipate it going up to previous levels near 11 bucks? I got in at 2.80 with 8k.

CrazyRichAggie said:

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GtownRAB said:

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CrazyRichAggie said:

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What's the general rule of covered call contracts sold to number of shares owned?

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OA has posted about them and it seems 50% is his standard

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So is that 1 contract for every 200 shares owned?

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Exactly. One additional thing and others can chine in if they do this but if the intraday stock is being supported and rising I will watch shorter time charts such as 1 Min and 5 Min and when I see a volume spike to the green I will try and maximize the premium. On some stocks the premium can really shoot up in a short time frame or fall in a short time frame intraday if IV is high. You could sell for $0.50 one minute and its $0.40 10 minutes later.

FJ43 said:

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third coast.. said:

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So how do yall time when to sell the covered calls or is that not necessarily a timing thing, or do yall look at technicals on that aspect as well. Closer to the strike date and how close it is to being in the money im sure has the largest impact.

For some reason this is the only thread on TA that will not load while im on my work computer so i have only been able to follow it intermittently over its lifespan.

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I look at the premiums being paid and the technical for projecting the rise of the underlying share value. In some cases like $WWR I bought shares and immediately sold the covered calls because the premium was really high for near date expirations. I also in this case sold a strike price to $12.50 vs the lower ones. I received less premium but if called out the reward was a lot more.

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I also bought and covered WWR, but at January $7.50 (so 50% return if called), but also sold the $5 puts everyone was looking at. So I might have a scenario where:

calls get exercised, puts expire, and I have profit but no stock.
Or it it drops, I puts will get exercised and I buy shares for a net of $3.97.
Or price hangs in the middle and I have original amount of net free shares of WWR.

Tibbers said:

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Do you anticipate it going up to previous levels near 11 bucks? I got in at 2.80 with 8k.

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If you are referring to $MBIO the recent Price Targets and have been maintained were a low of $9 and a high of $13. Yesterday was record volume levels and 2nd place wasn't even close. Something is brewing and you can see by looking at the past years volume build. It has been in a consolidation channel for about 6 months or longer. Now this may dip back down again into the $3 or maybe flash down below at which time I will add more. McInnis posted some insight to Bios flaring up this time of year and historically they have. However the volume build on this one for quite some time isn't your pump and dump.

I am looking for north of $7.50 minimum but will go net free before then the first chance I can get. I should add that I am patient on this one and not in a hurry for taking profits but more strategic to keep lowering my cost basis towards net free along the way. Then hopefully, someday it has its moment and I get paid handsomely.

You're not alone. My timing is pretty bad too, but be patient.

third coast.. said:

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Thanks. that just seems so incredibly easy. that is crazy to me that it never clicked. I am CERTAIN you can get bit, but keeping it simple as it is laid out in my post seems almost foolproof (in know it isnt).

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Wait until you learn how to use cash secured puts to lower your basis at entry!

Options have a lot of stigma but as oa mentions all the time, they are a great tool for lowering cost basis and generating cash on long holdings

NRD09 said:

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third coast.. said:

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Thanks. that just seems so incredibly easy. that is crazy to me that it never clicked. I am CERTAIN you can get bit, but keeping it simple as it is laid out in my post seems almost foolproof (in know it isnt).

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Wait until you learn how to use cash secured puts to lower your basis at entry!

Options have a lot of stigma but as oa mentions all the time, they are a great tool for lowering cost basis and generating cash on long holdings

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A good example of this is if you want more $WWR, but no guarantees of getting the shares, you can sell a Jan $5 put for $0.75 right now. You either keep the $0.75 or have a cost basis of $4.25 for a share if assigned that is currently trading at $5.50+ basically 3 weeks out.