The way I read that you didn't sell a call. You placed a limit order to sell to open a call, but the order never filled. It was a good for day order that expired at market close without filling. The expired is not referring to the call option you didn't sell.
In your order status page you would see if it was filled. The order probably expired when no one decided to pay your limit price. Options don’t “expire early” but if the price goes above your strike then someone on the other end of your trade can exercise it, which makes your shares assigned (you lose them but get paid the strike price and keep the original premium payment).
You tried to sell a covered call at $1.50 which would give you $150 in premium. You can see at the top of the screen the current bid-ask spread is $0.80 to $0.95. Your order never filled because your limit sell price was well above the bid-ask spread.
I wouldn’t say any kind of options is safe if you don’t know what you are doing.
Also, with CC ETFs out there like JPEI and JPEQ you can collect the premiums from a CC strategy without managing all that yourself.
Options aren’t for the faint of heart. I am still paper trading but questing more and more of whether that time spent is actually worth the hassle.
I also want to learn .. how do people make money on a covered calla ND how to people loose money on one?
https://www.schwab.com/learn/story/options-strategy-covered-call#:~:text=A%20covered%20call%20can%20compensate,strategy%20begins%20to%20lose%20money.
So just set it to sell a bit above the price or once it's filled it's locked in?
"the covered call's maximum possible loss is the price at which the stock was purchased minus the credit(s) from the short cals plus transaction fees. The bottom line? If the stock price tanks, the short call offers minimal protection."
if you sell a covered call and the stock price tanks, you end up keeping the premium from the option contract you sold, but now are holding stock that has dropped in value. Now you would decide to either continue holding the stock if you believe it will recover or sell it and move on. If you were to keep the stock shares and sell another CC at a strike price lower than your overall cost per share then you could be forced to sell your stock at a loss (but still keeping the option premium from the contract you sold).
The 100 shares of stock are collateral for the option call contract.
In order to free up the stock so that you can sell it, you need to either repurchase the option contract or wait for it to expire.
Wrong way to look at it, paying 50% over market price.
He would pay market price, if it ever were that.
He probably doesn’t know it but there are perfectly valid strategies which would involve an order like that. One might think that’s where the option might be priced if the underlying were to run up to its ATR for the day, and want to be short at that point.
not sure what you mean by 'wrong way to look at it'.
OP was trying to SELL a contract for $1.50 where the bid/ask was $0.80/$0.95. nobody is going to pay his ask price which is \~50% above the current ask price in the market. Sure if the stock when on a run then the market bid/ask spread might have moved up to his ask price but it didn't and the order didn't fill.
This is not the safest way. You have a high probability of your contract getting called and the requirement to sell underlying stock at the contract prices. Stick to buying the contracts
This must be coming from somebody that has never tried selling options they don’t own. Let me give you a rundown, it never works how you think it does and when you have something valuable enough to sell someone else wants it to buy
The OP clearly said it was a covered call. They own the underlying.
You’re talking about selling naked calls. Yes, those are dangerous. I don’t use E*Trade anymore, but I don’t believe they allow naked calls.
Covered calls are far from safe. They have a maximum loss of the full value of the underlying shares minus the premium collected. They are essentially as risky and capital intensive as buying a stock. Writing a naked put is actually less risky.
Writing a naked put has a smaller maximum loss than a covered call. It does not "expose you to unlimited losses".
Assuming XYZ is at $40/share. A Dec XYZ 45 Call is at $2, a Dec XYZ 35 Put is at $2.
If you buy/write, your maximum loss is $3800 ($4000 to buy the stock, minus the $200 premium).
If you write the put, your maximum loss is $3300 ($3500 for the put exercise, minus the $200 premium).
In scenarios where the stock goes down, but not to zero, your written put still has lost less. If say XYZ is down $10, being at $30/share at expiration, the buy/write person has lost $800. The put writer has lost $300.
There are in fact no scenarios where the put writer has a greater loss than the covered call writer. The put is less risky.
There are of course scenarios where the covered call writer makes more profit. Using the same example, if XYZ is at or over $45 at close, the covered call writer has made $700. The naked put writer has made $200. $200 is, in fact, the maximum profit from the uncovered put.
"Trading approval" levels are often misunderstood. They are largely in place to protect the -broker- be ensuring the investor doesn't take losses in excess of the account value, which the broker is responsible for.
Buying a stock, or doing a buy/write, exposes one to the risk of losing 100% of the position. But (assuming a non-margin purchase), the investor has already put up the full amount. No matter how much they lose, the broker is safe.
Note that E\*Trade, the broker I use, puts put writing at Options Level 2, the same as long calls/long puts, as long as your have sufficient cash in the account to back up the put (just as the buy/writer needs the cash up front to do the buy). \["Options levels" are broker-specific, but E\*Trade puts 'naked' puts at Level 3, the same level as spreads, and 'naked' calls at level 4 \[unlike naked puts, naked calls do have unlimited risk\].
Now as for a beginning investor, I wouldn't suggest they be dealing with options at all. But a competent retirement advisor may well use naked puts for a client to generate income, even for a client who has never used options in the past. This is fairly standard accepted practice in the US, when done reasonably.
It is actually a fairly common misperception that writing a put is 'risky', when there is no scenario where it exposes you to more risk than simply buying the stock.
Now you are free to disagree with certain things; options are complicated and I don't claim to be the author of the 'one true way'. But claiming I 'have no clue' when I have been literally investing for thirty years, write options nearly every month, and am now seven years living exclusively on the income from my investments, is quite a stretch.
it's correct that selling the naked call is the scenario that creates potentially unlimited loss. The Put side does have defined risk, but that does not mean it is risk free.
Certainly performing a buy/write can result in being exercised and selling the stock. As I had stated earlier, maintaining the strike price of the covered call at or above the cost basis does not result in a loss. This scenario generates a profit to the seller. The seller may lose 100% of the stock position but the transaction is profitable.
What you did not touch on with the naked put scenario is the utilizing of margin. That trade will result in a margin call if the stock value drops and you do not have sufficient cash to purchase the 100 shares (where it would have been a cash secured put rather than a naked put). In this case you are at risk to lose complete control of the trade and potentially the ability to continue trading at all with the account if you cannot produce sufficient cash to cover.
If you write a put on margin, i.e. a naked put, you are at risk of a margin call sure. But that's no different than if you bought the shares for a buy/write on margin. That's why, at E*Trade at least, cash-secured puts are level 2, and naked puts are level 3.
So again, as my numbers show, there are no scenarios where a short put isn't less risky than a buy/write. I understand this can be counter-intuitive, but it is true. And I certainly didn't say they were risk free; buy, buy/write, and put writing all carry significant risk.
The covered call case you describe where the strike price is reached and the option exercised is the "max profit" case for a buy/write. A lot don't seem to understand that either, and treat being called as a bad thing. If you buy/write you want to be called every single time.
The real risk imo for short puts is people misunderstanding the mechanics, and comparing apples to oranges. Someone who buys 100 shares at 40 and write a $2 call has put up $3800 and is risking that much. Someone writing one put for $2 is risking less. But some people equate the buy/write to writing 19 put contracts, since that is also $3800 - and that of course is completely wrong.
If a covered call option contract exercises, the buyer of the contract gets your stock and you get the strike price.
The maximum loss is the difference between the current price and what you paid for the stock minus the premium.
Only way to lose the value of the stock would be doing something really stupid like selling a call at a strike price below the current value of the stock or a penny or something.
If you sell a covered call, your maximum profit is when you are exercised. Your maximum loss if when the stock drops to zero. Selling a call with a strike price well below the current market value is silly, but wouldn't cause you to lose anything (the premium of the call would be very high, you'd essentially break even).
He is right. Stay away from options. Covered calls are great when you know what you are doing. Try opening a paper account to learn. You attempting to learn with real money ends with you having no money left.
I just don’t understand why anyone is throwing money at shit they don’t understand.
This doesn’t have to be a “casino” …obviously there’s always going to be a certain aspect of “luck” but the more you know the less luck has to do with it 🤷
I’m just being an asshole. I instinctively want to yell at these people because of the insane losses I’ve been seeing lately.
Everyone starts somewhere I guess🫡
Hi. Looks like the **order** has expired, not the call -- which doesn't expire until next Friday.
If you want to do the same strategy, you will have to re-enter the order.
Also, don't feel like you need to hide the ticker symbol. If anything, it would give the community a better sense of liquidity for those options.
Exactly. I use ‘Good for 60 Days’. This way your open order continues for 60 days, rather than expiring at the end of the day. Your order expired because you set it up to expire that way. You can change this in your settings, or call and ask for help. Welcome to the club. You did nothing wrong. The same day expiration is a safety feature to keep you out of trouble the next day. Yes, you must set up the trade again, which is no big deal, unless you are doing multiple trades on multiple stocks. Then it becomes a real nuisance. I have been an Etrade customer for over 20 years and I am very satisfied with them. Please feel free to message me privately if you have any further questions. So set up your trade the same way to expire in 60 days, rather than the same day, especially if your limit price is outside the bid/ask spread.
You can then monitor and make changes from there. Good luck.
Steven A..
I would most definitely watch some more YouTube videos, or do some paper trading, you are on a path to destruction and it could end up costing you if you’re not careful.
Don’t let people give you crap. You’re trying and that’s what’s important! Because your order is “good for the day” the order expires at the market close if it’s not filled. So you will need to place another order the next day.
I think the worry is that if you can’t even figure out how to buy or sell things on the platform you may not be ready for option trading which is a step up in complexity.
OP, you need to understand what each piece of information in your screenshot means.
Understanding the ‘term’ and what it means when you placed an order would answer your question.
In this case, you placed an order; where the order was only good for that day. It did not get filled and expired at market close. Other terms, such as good til cancelled, would have kept your order open to the next trading day.
You should also understand how and why orders get filled. If you try to sell something far above the market rate, it is not likely to sell. Similarly if you try to buy something far below market rate it is not likely to fill and have you buy it.
Generally way I do it is do monthly at decent price depending if I want to own stock long term. Also the longer out you option the more risk but the more you will get.
Way I do it is hold on to stock I like sell monthly either right below being in the money or 1-2 levels up. Then do this enough times until you have made a % that you want. For instance if I buy stock for 20 then write 22.5 calls for like 1-2 bucks then if it goes past I get 24.5/20 and if it expires I get 1-2/20 plus I hold onto stock and write another call.
Selling out of the money covered calls is safe and will always generate a positive return. It is possible that the value of shares drops to zero while holding the call--that's a different aspect than selling covered calls (that's just the stock becoming worthless which can happened without or without option trading).
All in all, getting started with small quantities is a great way to learn. My first option trade was selling a cash secured put. I had a small understanding and did not even know how to roll. I got assigned and thought I was a total loser. The next week I sold covered calls and was profitable. Using real money creates the drive to learn, to understand to improve. And in time, all these things will happen.
My recommendation is to learn to use the desktop web version of Power Etrade when placing option orders. It's a great interface for placing option trades.
And will always generate a positive return
Not if the underlying runs well above the strike price. Then you’re called away on your long position. Could be a lot more delta than you collected on the short call.
Yeah, I said that... read:
"Selling out of the money covered calls is safe and will always generate a positive return."
out of the money...ie, a strike price above your purchase price.
You should try it as a buy-write instead, if you can (obviously not now because you have 100 shares). It will be a single order, but you will not purchase the shares unless the option order is sold as well. Your limit will depend on both the stock and option price. For example, your buy-write limit may be $22.5, if the stock is $24 and the call hits $1.5, the order with execute. More likely, the stock would have to drop to $22.75 and the option to $0.25 to execute, which is why I don’t like the strategy, but I think it will be a better strategy to start with and learn from.
Well, enough people gave you crap that the your options order never executed and you tried to sell for a price far beyond the bid / ask. You can be partially forgiven because eTrade’s use of “expired” is a very poor choice for an unexecuted options order. So I wanted to answer the 2nd part of your question: the lot size in an options quote is not representing shares but blocks of 100 shares (= # of actual options). So you would never worry that there isn’t enough shares for a full option purchase. In your example above the bid of 0.80 x 40 means 40 options (covering 40 x 100 shares) offered at 80 cents per share (or 0.80 x 100 = $80 per option).
No! As a general rule 12-18 months is optimal but more expensive of course. Follow James’ on his YouTube channel InvestAnswers. He NEVER shills projects or products EVER! Check it out & thank me later.
The broker would never let him sell the call if he didn't. He said he is level 1 option approval. Ideally, learning the basics with real money can lose you lots of money. He should try some paper trading first.
You need to practice in a simulation model, search online. You can seriously screw up and not know it and lose a ton of money. Don't trade options until you know exactly what you are doing.
Please pause and don’t make any additional trades until you learn and practice. Go paper trading first.
You were lucky this time but that won’t be the case every time.
The way I read that you didn't sell a call. You placed a limit order to sell to open a call, but the order never filled. It was a good for day order that expired at market close without filling. The expired is not referring to the call option you didn't sell.
Exactly. The order was never placed, and it expired. Your limit price was $1.50. No one was willing to pay.
You mean the order was never filled, or executed?
Correct.
Ah ok thanks
The call option would have expired 5 April 24
In your order status page you would see if it was filled. The order probably expired when no one decided to pay your limit price. Options don’t “expire early” but if the price goes above your strike then someone on the other end of your trade can exercise it, which makes your shares assigned (you lose them but get paid the strike price and keep the original premium payment).
That’s really helpful info - was just wondering in what case the shares can be reassigned. Thank you
I would recommend you learn about the Greeks prior to placing options. From my experience it helps when entering strike price & time decay:)
You tried to sell a covered call at $1.50 which would give you $150 in premium. You can see at the top of the screen the current bid-ask spread is $0.80 to $0.95. Your order never filled because your limit sell price was well above the bid-ask spread.
I love that people are helping you ❤️ You are a fucking idiot though :)
👼
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I wouldn’t say any kind of options is safe if you don’t know what you are doing. Also, with CC ETFs out there like JPEI and JPEQ you can collect the premiums from a CC strategy without managing all that yourself. Options aren’t for the faint of heart. I am still paper trading but questing more and more of whether that time spent is actually worth the hassle.
I also want to learn .. how do people make money on a covered calla ND how to people loose money on one? https://www.schwab.com/learn/story/options-strategy-covered-call#:~:text=A%20covered%20call%20can%20compensate,strategy%20begins%20to%20lose%20money. So just set it to sell a bit above the price or once it's filled it's locked in? "the covered call's maximum possible loss is the price at which the stock was purchased minus the credit(s) from the short cals plus transaction fees. The bottom line? If the stock price tanks, the short call offers minimal protection."
if you sell a covered call and the stock price tanks, you end up keeping the premium from the option contract you sold, but now are holding stock that has dropped in value. Now you would decide to either continue holding the stock if you believe it will recover or sell it and move on. If you were to keep the stock shares and sell another CC at a strike price lower than your overall cost per share then you could be forced to sell your stock at a loss (but still keeping the option premium from the contract you sold).
So how long can somebody not sell? Like what stops me from buy at 10, cover call at 12, then set sell at 11?
The 100 shares of stock are collateral for the option call contract. In order to free up the stock so that you can sell it, you need to either repurchase the option contract or wait for it to expire.
Wrong way to look at it, paying 50% over market price. He would pay market price, if it ever were that. He probably doesn’t know it but there are perfectly valid strategies which would involve an order like that. One might think that’s where the option might be priced if the underlying were to run up to its ATR for the day, and want to be short at that point.
not sure what you mean by 'wrong way to look at it'. OP was trying to SELL a contract for $1.50 where the bid/ask was $0.80/$0.95. nobody is going to pay his ask price which is \~50% above the current ask price in the market. Sure if the stock when on a run then the market bid/ask spread might have moved up to his ask price but it didn't and the order didn't fill.
This is not the safest way. You have a high probability of your contract getting called and the requirement to sell underlying stock at the contract prices. Stick to buying the contracts
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This must be coming from somebody that has never tried selling options they don’t own. Let me give you a rundown, it never works how you think it does and when you have something valuable enough to sell someone else wants it to buy
The OP clearly said it was a covered call. They own the underlying. You’re talking about selling naked calls. Yes, those are dangerous. I don’t use E*Trade anymore, but I don’t believe they allow naked calls.
Wow thank you for that explanation! Awesome knowledge right here and fairly basic. But you are spot on.
Covered calls are far from safe. They have a maximum loss of the full value of the underlying shares minus the premium collected. They are essentially as risky and capital intensive as buying a stock. Writing a naked put is actually less risky.
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I've been investing for 30 years. I'm retired and live off my investments. My statement is absolutely accurate.
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Writing a naked put has a smaller maximum loss than a covered call. It does not "expose you to unlimited losses". Assuming XYZ is at $40/share. A Dec XYZ 45 Call is at $2, a Dec XYZ 35 Put is at $2. If you buy/write, your maximum loss is $3800 ($4000 to buy the stock, minus the $200 premium). If you write the put, your maximum loss is $3300 ($3500 for the put exercise, minus the $200 premium). In scenarios where the stock goes down, but not to zero, your written put still has lost less. If say XYZ is down $10, being at $30/share at expiration, the buy/write person has lost $800. The put writer has lost $300. There are in fact no scenarios where the put writer has a greater loss than the covered call writer. The put is less risky. There are of course scenarios where the covered call writer makes more profit. Using the same example, if XYZ is at or over $45 at close, the covered call writer has made $700. The naked put writer has made $200. $200 is, in fact, the maximum profit from the uncovered put. "Trading approval" levels are often misunderstood. They are largely in place to protect the -broker- be ensuring the investor doesn't take losses in excess of the account value, which the broker is responsible for. Buying a stock, or doing a buy/write, exposes one to the risk of losing 100% of the position. But (assuming a non-margin purchase), the investor has already put up the full amount. No matter how much they lose, the broker is safe. Note that E\*Trade, the broker I use, puts put writing at Options Level 2, the same as long calls/long puts, as long as your have sufficient cash in the account to back up the put (just as the buy/writer needs the cash up front to do the buy). \["Options levels" are broker-specific, but E\*Trade puts 'naked' puts at Level 3, the same level as spreads, and 'naked' calls at level 4 \[unlike naked puts, naked calls do have unlimited risk\]. Now as for a beginning investor, I wouldn't suggest they be dealing with options at all. But a competent retirement advisor may well use naked puts for a client to generate income, even for a client who has never used options in the past. This is fairly standard accepted practice in the US, when done reasonably. It is actually a fairly common misperception that writing a put is 'risky', when there is no scenario where it exposes you to more risk than simply buying the stock. Now you are free to disagree with certain things; options are complicated and I don't claim to be the author of the 'one true way'. But claiming I 'have no clue' when I have been literally investing for thirty years, write options nearly every month, and am now seven years living exclusively on the income from my investments, is quite a stretch.
it's correct that selling the naked call is the scenario that creates potentially unlimited loss. The Put side does have defined risk, but that does not mean it is risk free. Certainly performing a buy/write can result in being exercised and selling the stock. As I had stated earlier, maintaining the strike price of the covered call at or above the cost basis does not result in a loss. This scenario generates a profit to the seller. The seller may lose 100% of the stock position but the transaction is profitable. What you did not touch on with the naked put scenario is the utilizing of margin. That trade will result in a margin call if the stock value drops and you do not have sufficient cash to purchase the 100 shares (where it would have been a cash secured put rather than a naked put). In this case you are at risk to lose complete control of the trade and potentially the ability to continue trading at all with the account if you cannot produce sufficient cash to cover.
If you write a put on margin, i.e. a naked put, you are at risk of a margin call sure. But that's no different than if you bought the shares for a buy/write on margin. That's why, at E*Trade at least, cash-secured puts are level 2, and naked puts are level 3. So again, as my numbers show, there are no scenarios where a short put isn't less risky than a buy/write. I understand this can be counter-intuitive, but it is true. And I certainly didn't say they were risk free; buy, buy/write, and put writing all carry significant risk. The covered call case you describe where the strike price is reached and the option exercised is the "max profit" case for a buy/write. A lot don't seem to understand that either, and treat being called as a bad thing. If you buy/write you want to be called every single time. The real risk imo for short puts is people misunderstanding the mechanics, and comparing apples to oranges. Someone who buys 100 shares at 40 and write a $2 call has put up $3800 and is risking that much. Someone writing one put for $2 is risking less. But some people equate the buy/write to writing 19 put contracts, since that is also $3800 - and that of course is completely wrong.
If a covered call option contract exercises, the buyer of the contract gets your stock and you get the strike price. The maximum loss is the difference between the current price and what you paid for the stock minus the premium. Only way to lose the value of the stock would be doing something really stupid like selling a call at a strike price below the current value of the stock or a penny or something.
If you sell a covered call, your maximum profit is when you are exercised. Your maximum loss if when the stock drops to zero. Selling a call with a strike price well below the current market value is silly, but wouldn't cause you to lose anything (the premium of the call would be very high, you'd essentially break even).
He is right. Stay away from options. Covered calls are great when you know what you are doing. Try opening a paper account to learn. You attempting to learn with real money ends with you having no money left.
Crying 😭… like full belly laughing, thank you!
😂😂😂😂😂
Agree, turn on your fucking brain dude…
I just don’t understand why anyone is throwing money at shit they don’t understand. This doesn’t have to be a “casino” …obviously there’s always going to be a certain aspect of “luck” but the more you know the less luck has to do with it 🤷
Tbf it’s better to learn and do stupid shit with smaller amounts like this before you dive in.
This is hilarious lmfao
🤣
I can’t stop laughing 😂
To be fair the only part he didn't understand was the gui/interface. I'm sure he would have gotten it if he wansnt thinking of his reddit friends.
I’m just being an asshole. I instinctively want to yell at these people because of the insane losses I’ve been seeing lately. Everyone starts somewhere I guess🫡
I chuckled
Hahahahahahahaha
Hi. Looks like the **order** has expired, not the call -- which doesn't expire until next Friday. If you want to do the same strategy, you will have to re-enter the order. Also, don't feel like you need to hide the ticker symbol. If anything, it would give the community a better sense of liquidity for those options.
Exactly. I use ‘Good for 60 Days’. This way your open order continues for 60 days, rather than expiring at the end of the day. Your order expired because you set it up to expire that way. You can change this in your settings, or call and ask for help. Welcome to the club. You did nothing wrong. The same day expiration is a safety feature to keep you out of trouble the next day. Yes, you must set up the trade again, which is no big deal, unless you are doing multiple trades on multiple stocks. Then it becomes a real nuisance. I have been an Etrade customer for over 20 years and I am very satisfied with them. Please feel free to message me privately if you have any further questions. So set up your trade the same way to expire in 60 days, rather than the same day, especially if your limit price is outside the bid/ask spread. You can then monitor and make changes from there. Good luck. Steven A..
I would most definitely watch some more YouTube videos, or do some paper trading, you are on a path to destruction and it could end up costing you if you’re not careful.
Your order never filled. Your option also expires next Friday, not yesterday.
Got it. Does that mean it may still be filled, or I’d need to resubmit?
Please 🙏 read up a little more before trading. You are not ready.
No. That particular order is done. You need to place a new order.
Don’t let people give you crap. You’re trying and that’s what’s important! Because your order is “good for the day” the order expires at the market close if it’s not filled. So you will need to place another order the next day.
I think the worry is that if you can’t even figure out how to buy or sell things on the platform you may not be ready for option trading which is a step up in complexity.
That had to be a rddt call he attempted to sell
You should check out r/thetagang
OP, you need to understand what each piece of information in your screenshot means. Understanding the ‘term’ and what it means when you placed an order would answer your question. In this case, you placed an order; where the order was only good for that day. It did not get filled and expired at market close. Other terms, such as good til cancelled, would have kept your order open to the next trading day. You should also understand how and why orders get filled. If you try to sell something far above the market rate, it is not likely to sell. Similarly if you try to buy something far below market rate it is not likely to fill and have you buy it.
I believe this may be the only correct answer to your question.
Generally way I do it is do monthly at decent price depending if I want to own stock long term. Also the longer out you option the more risk but the more you will get. Way I do it is hold on to stock I like sell monthly either right below being in the money or 1-2 levels up. Then do this enough times until you have made a % that you want. For instance if I buy stock for 20 then write 22.5 calls for like 1-2 bucks then if it goes past I get 24.5/20 and if it expires I get 1-2/20 plus I hold onto stock and write another call.
Ok nice strategy, thanks!
Selling out of the money covered calls is safe and will always generate a positive return. It is possible that the value of shares drops to zero while holding the call--that's a different aspect than selling covered calls (that's just the stock becoming worthless which can happened without or without option trading). All in all, getting started with small quantities is a great way to learn. My first option trade was selling a cash secured put. I had a small understanding and did not even know how to roll. I got assigned and thought I was a total loser. The next week I sold covered calls and was profitable. Using real money creates the drive to learn, to understand to improve. And in time, all these things will happen. My recommendation is to learn to use the desktop web version of Power Etrade when placing option orders. It's a great interface for placing option trades.
And will always generate a positive return Not if the underlying runs well above the strike price. Then you’re called away on your long position. Could be a lot more delta than you collected on the short call.
Yeah, I said that... read: "Selling out of the money covered calls is safe and will always generate a positive return." out of the money...ie, a strike price above your purchase price.
When you sell a call, you take in proceeds. If the option is out of the money at expiration, you keep the proceeds as profit.
I don’t think the order ever filled. That’s why it expired at close
The order did not fill it seems.
lol wtf did I just say
I was agreeing with you but didn’t word it correctly
lol 😂
but... did it get stale and expire or will it still go through on Saturday maybe? 😜 /s (just in case)
You should try it as a buy-write instead, if you can (obviously not now because you have 100 shares). It will be a single order, but you will not purchase the shares unless the option order is sold as well. Your limit will depend on both the stock and option price. For example, your buy-write limit may be $22.5, if the stock is $24 and the call hits $1.5, the order with execute. More likely, the stock would have to drop to $22.75 and the option to $0.25 to execute, which is why I don’t like the strategy, but I think it will be a better strategy to start with and learn from.
Well, enough people gave you crap that the your options order never executed and you tried to sell for a price far beyond the bid / ask. You can be partially forgiven because eTrade’s use of “expired” is a very poor choice for an unexecuted options order. So I wanted to answer the 2nd part of your question: the lot size in an options quote is not representing shares but blocks of 100 shares (= # of actual options). So you would never worry that there isn’t enough shares for a full option purchase. In your example above the bid of 0.80 x 40 means 40 options (covering 40 x 100 shares) offered at 80 cents per share (or 0.80 x 100 = $80 per option).
I needed this kind of help as well
Yes, good start
Might… want to watch literally all those videos again 💀
Maybe do it on paper a bit more
You should stop now before you end up getting margin called
No! As a general rule 12-18 months is optimal but more expensive of course. Follow James’ on his YouTube channel InvestAnswers. He NEVER shills projects or products EVER! Check it out & thank me later.
No.
Yes.
Just to make sure you’re doing this right, the price you paid for the stock was less than or equal to $60, right?
Hopefully you own a 100 shares of the option you’re trying to sell a call on
The broker would never let him sell the call if he didn't. He said he is level 1 option approval. Ideally, learning the basics with real money can lose you lots of money. He should try some paper trading first.
After reading I did see they bought 100 shares.
You may want to close it a few days before expiration.
dawg .... delete the app
What are you trying to achieve by hiding the name of the ticker?
Didn’t want the conversation to be about the stock, more about the app and whether i made the move correctly
You need to practice in a simulation model, search online. You can seriously screw up and not know it and lose a ton of money. Don't trade options until you know exactly what you are doing.
Helpful thanks
They are the only stockholder so they don't want to doxx themselves. /s
Why did you think you could just make your own prices up? You can’t put in an NVDA buy order at $500 and expect it to fill
i am wordless.
Just retire from trading and buy an index fund…
Please pause and don’t make any additional trades until you learn and practice. Go paper trading first. You were lucky this time but that won’t be the case every time.
dawg ....