third coast.. said:

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Jet Black said:

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Question

PLTR is currently trading right under $25.00. Seems like a decent chance it will hit $25 fairly soon. Why wouldn't you sell a call fairly far out, pocket the large premium, if you are fine with getting called out in the short term?

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most of the time you will not get called out until the date the option expires. You are basically losing control of the shares until then. Today is also a down day so you want to sell your CCs on a pop and buy them back on a dip. This is how you collect the premium to lower your cost basis on the underlying.

If you sell calls with far off expiry, you can not rinse and repeat the sale and purchase of the calls to lower your basis.

Also, if you think it will go to $25 in the short term, what do you think it will do in the long term?Are you ok with selling those shares for $25 in 6 months when the stock is trading at $50? Are you ok with buying those covered calls back at a huge loss?

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Ok, I didn't realize I wouldn't get called out until the exp date.

1000 contracts on $SPLK Mar12, 160C, trading at $148, earnings today.....bought AT THE ASK $3.40.

This isn't a "poor me" post. I'm posting so that fellow newbs who are lurking can learn from my errors.

2nd day in a row of being an idiot. Except today is the opposite.

This morning I saw UWMC running up pre-mkt and I cancelled my sell orders on my calls (which were set at my price required for net free). I wasn't able to trade right at the open, but I figured it might run a little and I didn't want to leave anything on the table.

Bought some May $10C yesterday for $1.16, and some Dec $12.5C for $1.61

Right away I set my sell orders on half of the contracts of each for my net free price of $2.35 and $3.30, respectively.

This morning at the open, the price for each touched $3.30 and $3.60, respectively.

I should never have cancelled the sell orders if I wasn't confident that I would be able to monitor the trade at the open.

I know I've got a lot of time left, but it sure would have been nice to be sitting net free right now. Hopefully it will make some more moves and I'll get another shot at it.

Hiding the ticker intentionally. Has anyone seen open interest like this in awhile? Sheesh. On second thought, I guess SNDL has similar numbers. I guess people love cheap stuff.

RigsTx said:

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Used the Uber runup to go basically net free on my calls.

Now we play the waiting game...

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Same, hopefully the rest can run

DNN comes to mind from a few weeks ago when the 2.5 calls were going crazy. (that's not my guess, I know that chain isn't for DNN)

Net free on UBER

ehrmantraut said:

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Net free on UBER

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Volume starting to pick up. I think she's going to keep running.

UWMC gaining some momentum.

third coast.. said:

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Jet Black said:

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Question

PLTR is currently trading right under $25.00. Seems like a decent chance it will hit $25 fairly soon. Why wouldn't you sell a call fairly far out, pocket the large premium, if you are fine with getting called out in the short term?

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most of the time you will not get called out until the date the option expires. You are basically losing control of the shares until then. Today is also a down day so you want to sell your CCs on a pop and buy them back on a dip. This is how you collect the premium to lower your cost basis on the underlying.

If you sell calls with far off expiry, you can not rinse and repeat the sale and purchase of the calls to lower your basis.

Also, if you think it will go to $25 in the short term, what do you think it will do in the long term?Are you ok with selling those shares for $25 in 6 months when the stock is trading at $50? Are you ok with buying those covered calls back at a huge loss?

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So how does that work? Stock hits the strike price but you still hold the shares in your account until expiry. What if the price drops back below the strike price?

McInnis 03 said:

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Jet Black said:

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Question

PLTR is currently trading right under $25.00. Seems like a decent chance it will hit $25 fairly soon. Why wouldn't you sell a call fairly far out, pocket the large premium, if you are fine with getting called out in the short term?

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I sell CC's on my shares too in the shorter term.

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If selling CC is to collect added income (rather than hedging delta) you should keep expiration within 60 days as this is optimal decay. Have seen studies saying 40ish days is best.

Jet Black said:

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third coast.. said:

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Jet Black said:

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Question

PLTR is currently trading right under $25.00. Seems like a decent chance it will hit $25 fairly soon. Why wouldn't you sell a call fairly far out, pocket the large premium, if you are fine with getting called out in the short term?

---

most of the time you will not get called out until the date the option expires. You are basically losing control of the shares until then. Today is also a down day so you want to sell your CCs on a pop and buy them back on a dip. This is how you collect the premium to lower your cost basis on the underlying.

If you sell calls with far off expiry, you can not rinse and repeat the sale and purchase of the calls to lower your basis.

Also, if you think it will go to $25 in the short term, what do you think it will do in the long term?Are you ok with selling those shares for $25 in 6 months when the stock is trading at $50? Are you ok with buying those covered calls back at a huge loss?

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So how does that work? Stock hits the strike price but you still hold the shares in your account until expiry. What if the price drops back below the strike price?

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At any time a person who owns a contract can call out shares, even if it's below the strike. It typically won't happen early, but it can. Back when SNDL ran, I had some $2 calls get exercised a week or two before expiry. You hold the shares until the contract is exercised or expires.

AGSmith said:

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irish pete ag06 said:

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third coast.. said:

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anyone that uses Fidelity, how do you set up 'trade armor' on options? Best I can tell you can only set up a stop or a limit to sell on options instead of setting up both on a contract. It is pretty frustrating having to cancel an order in order to put in another one and wastes precious time.

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This bugs the crap out of me too.

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I think you have to set up a "Conditional" > "One Cancels the Other" order

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Thanks. I will look into this. The little "trade armor" shield is not even beside options on ATP

So anytime until expiry I can choose to close the option and sell shares if I want too?

Jet Black said:

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So anytime until expiry I can choose to close the option and sell shares if I want too?

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Yes, but if you sold a covered call you have to buy it back (buy to close) at the market price.

irish pete ag06 said:

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AGSmith said:

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irish pete ag06 said:

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third coast.. said:

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anyone that uses Fidelity, how do you set up 'trade armor' on options? Best I can tell you can only set up a stop or a limit to sell on options instead of setting up both on a contract. It is pretty frustrating having to cancel an order in order to put in another one and wastes precious time.

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This bugs the crap out of me too.

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I think you have to set up a "Conditional" > "One Cancels the Other" order

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Thanks. I will look into this. The little "trade armor" shield is not even beside options on ATP

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I'm still keeping an eye on KPMH. And in a little. Bought some shares and calls on dips. Could model T back up but also thinking this is decent long term hold with potential to be acquired by big pharma.

Getting halted this morning wrecked the run then people started taking profit and scalping. We'll see if it can work its way up.

gvine07 said:

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Jet Black said:

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So anytime until expiry I can choose to close the option and sell shares if I want too?

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Yes, but if you sold a covered call you have to buy it back (buy to close) at the market price.

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Yep.

McInnis 03 said:

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Hiding the ticker intentionally. Has anyone seen open interest like this in awhile? Sheesh. On second thought, I guess SNDL has similar numbers. I guess people love cheap stuff.

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Check out the OI on DNN for 3/19 $2.5 calls.

What the heck is going on there?

I would be ecstatic if it got to that.

What is everyone's thoughts on SKLZ options?

Earnings are 3/10 so that could be a catalyst at some point.

They have taken a beating since I got in.

Redler and rip pushing this. $40 pt

AgShaun00 said:

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Redler and rip pushing this. $40 pt

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And I'm now cancelling my covered call limit sell I had on this.

Challenger 17 said:

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What is the play on this? It's not on his MA listing on the spreadsheet.

Too late I asume?

wjbrown88 said:

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Who's going to play BUZZ?

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I kind of wonder if they are going to use the influx of cash to run all the meme stocks back up (NOK, BB, BBY, NAKD, AMC, etc.).

And some of were selling some really stupid ccs on cx

About to pull the trigger on AMZN if it drops below 3k. They're going to blow out earnings all year.

I plan on buying more as well. Not really holding out hope for earnings, that's a given. Trying to accumulate so that I can retire when it does a 10:1 split

Hendrix said:

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About to pull the trigger on AMZN if it drops below 3k. They're going to blow out earnings all year.

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I mean it's like 1% away from that.. why wait for 2999?

AgShaun00 said:

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Redler and rip pushing this. $40 pt

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You can make some dang cheap OTM bull call spreads on this if you believe.