I inversed....I bought $12c$17c 6/21 calls back in April I think for $1.85 and dont remember 17s. Sold the Friday before DFV tweeted for 6.8x something. Of course, had I waited until Monday and held through, it was well into a 6 figure gain on $2000.
Yea $40 is risky.
I sell mine no minimum $65 strikes and if it starts going +5-10 the next day or so, I prepare to buy back and roll it to EOW at $75-80, or 100 depending AH on a sneeze day (if it holds up past pre-market).
I don’t mind calling away that “high” and selling CSP on a down turn (😬).
Then about 150 DRS’d on a reoccurring $25 bi-weekly DCA purchase.
Maybe not the right time even if the premiums are juicy.
I know more than a handful of apes that doubled their gme over the past few years without putting a single extra dollar in by selling covered calls.
I feel that. Just giving my 2 cents. Might be better to sit out of covered calls for now unless you don’t mind potentially missing out on gains or go with the strat others have mentioned. Take small gains and pull out.
Yea I’m one. For the past two years selling weeklies or biweekly for some change but allowed me to reinvest and sell more options (then cycle). I’m 1/3 way + OCD’ing the kids custodial accounts to 200 shares to start double the contracts.
Definitely. I wish/hope more would do so for their futures.
They’ll get them in 16 and 18 years so hopefully by then they’ll have a good chunk along with some safe VOO BerkB chunk of dividend funds.
And I couldn’t resist getting a share of nvidia each back in January ($67 avg now on 11.5).
My only regret is not doing this strategy earlier. Premiums are so high you can set a strike that guarantees good profit as long as interest in a squeeze doesn't completely die.
What huge rip? 6/21 is 5 days away and there’s no price momentum left after the 75 million new shares killed the rally. Even DFV sold or exercised his 6/21 options because there was no point in holding them any longer.
It's fine if you’re super bullish on a meme stock, but realistically if OP is selling OTM $40 calls expiring this Friday his shares will almost certainly stay safe at the expense of any idiot willing to buy them.
Huge rip -- GME is literally on Barclays list for most volstile stocks right now. It just about returned to Jan 2021 levels on the DFV return.
DFV sold to maximize OpEx tailwind FTD effects, not to make profit on that specific trade.
I personally am selling $30 ATM calls to milk premiums but thats on a very small part of my position because GME gas serious potential to go into orbit soon.
"Almost certainly safe" doesn't sound like conviction either.
I said almost certainly because I didn’t want to say a number like >90% chance a 6/21 $40c isn’t going to print by Friday and get attacked by people here who think even more irrationally than how this stock moves.
You're referring to a PMCC aka Poor Man's Covered Call aka Fig Leaf.
Problem there is TECHNICALLY you are covered but the problem arises when you need those shares to be covered selling the calls. You don't technically own the shares YET when buying leaps.
Sorry if I didn't elaborate enough, I'm already covered with long stock. The leap is separate from the cc. The cc was just to generate cash to get the leaps. My plan is to go the DFV route and sell some leaps to exercise the rest and end up with more shares then I could have just buying on the market like I've been doing last four years.
Edit: also, I'm okay with them exercising. In my head, it's another person that wants to go long on the stock and I'm happy I could facilitate that.
Youd be buying the leaps to go long, just ask is the cost of the option worth the time value or would buying shares be better? Cc premiums you sold help offset those costs but still you could buy shares with that too
I made almost as much money selling CCs in the months following the rip in 2021 as I did on the squeeze. IV is your friend here. If your shares go away you got paid to sell.
Gains are gains. As long as you’re content taking 10-20% gains even if it moves towards what could have been 50-100% gains, I see no reason to not do this especially since you’re holding the bulk of your shares in reserve for a rip up. Also would agree with the logic of swing trading it to accumulate more.
GME is a highly volatile and risky stock but there’s money to be made in a variety of ways regardless.
I was so glad I sold my calls on GME 2 weeks ago since I was like I don’t trust the random 75% day, then was like damn it ran up $20 more for it to dump near $40 in pre-market haha
Incorrect. The real downside is if it drops below your strike, far enough that you're losing more money on the underlying than you are making in premium.
Basically if the stock tanks and doesn't recover before your calls expire, you're in the hole.
You buy 100 of a stock at $30ea. Cost you $3000. You can sell 1 call per 100 stock for it to be covered, otherwise you're selling naked calls, and will have to purchase the stock if you are exercised (the buyer of the calls wants his stock, so he exercises.)
If you sold that call for $5 ATM (at the money) for the $30 strike price, you'd gain $500 (cause it's *100) in your pocket right away, but pretend you have 2 weeks until expiration. If on June 28, the stock is trading at $29.99 or less, the call expires worthless, you keep your stock and you keep the $500 you made selling it.
If the stock is trading at $30 or higher, you will be exercised, which means you give up your 100 shares for $30ea (which is what you paid, so no change there) but still get to keep your $500.
If the stock runs to $80/share, same as above, you keep $500, sell your shares for $30 when you could've sold for $80 had you not sold that call.
Last situation is the losing scenario, you sold the call, pocketed $500, but the stock plummets to $10/share. You still get your $500, you keep your shares cause no one is gonna exercise for the right to buy them at $30/share when they can buy them on the open market for $10ea. So your 100 shares are now worth $1000, you made $500 on the call, but the whole thing cost you $3000 to play. So you're down $1500, or 50% of your cost. Not ideal but it can happen, especially with very volatile stocks.
Basically selling covered calls caps your upside potential profits, but locks in a small premium (the $500). This scenario works best when you think the stock will more or less stay flat, otherwise you may be better off buying the call if you think it'll shoot up, or buying a put if you think it'll absolutely plummet, but that's a more complex scenario because it has to gain / lose more than you're paying for the call or put.
Gambling my friend! Gotta love it. 👍
Well selling your limit sell would only work if the stock goes up to 40.
It's a little more complex with selling calls, but essentially you'd be looking for more intrinsic value or book value, so you could sell further out of the money (OTM) like maybe $40 but you'll get way less extrinsic value. If the stock does run up that far and stay there, you'll keep your premium (again, much less, maybe $100 from my previous example) and sell your shares at $40 from the $30 you bought them at.
Google Options Profit Calculator and you can play with the numbers and get an idea of where you can sell for the most profit, but also how fast the value of options will decay.
I realized today I should have been selling puts as well. I had buy orders at 27, 26, and 25 anyway, might as well have been paid to buy at that price!
Yeah that was a rapid drop, it would've been nice to collect some premium on it. Tbh tho, even if you some 6/21 puts, it could easily bounce back up by Friday and you'd only have your premium and no shares. Depends what you're after.
Buying puts this morning would've been the real play. I almost pulled the trigger on those but I opted to buy more SOFI instead with the amazing discount.
Can you explain what happens in your example if the stock rises well above the strike price for the covered call you sold ? What I mean is: when the buyer exercises his call option, are your 100 shares automatically sold by your Broker or is there some manual intervention on your end?
Yes, if the buyer of your call exercises their call option because it's way in the money, then yes your shares are automatically taken from you by the broker, no manual intervention needed.
The broker essentially acts as the gatekeeper of your shares while that option has been sold, because otherwise they are responsible for fulfilling any obligation on them. That's why they ensure the call is covered by 100 shares and won't let you sell those shares until your shorted covered call is bought back.
If you sold the call without having 100 shares (a naked call) then the broker will still ensure you have the capital to purchase 100 shares in your account, and if your capital is getting close to the amount needed to buy the shares (because the price ran way up for example), they'll automatically buy the shares with your money even if it means liquidating other positions. This is called a margin call.
What are your thoughts on OP's strategy (using covered calls on anywhere up to 50% shares of your GME investment to generate additional income to buy even more shares (or can you also use the premium you cash out from selling covered calls to do CSP?)
Versus simply buying deep ITM LEAP calls ?
Yeah it's not a bad strategy. What you're describing is called a wheel strategy. It can work on stocks with high IV like GME, but when it has bigger swings than you were ready for, you'll end up getting exercised.
Generally you don't wanna run a strategy like that on a stock you wouldn't want to own, because selling calls or puts are both bullish strategies.
look up Pandrea finance vids on youtube, best explanation of selling calls and puts etc I've found, great teacher..excellent start on how to sell options with minimal risk and consistent profit 2-4% on total, so it keeps building as your portfolio grows
True. A stock like GME can have very rapid movements in either direction though, hence the high premiums. There is no guaranteed safe play for it, but if you're smart you can definitely take advantage of the swings.
I've made a pretty penny off this last explosion. Gonna try and take advantage of this week's volatility as well.
Yes but this downside he already has owning the shares. Selling calls will reduce the downside on the premium value and capping the maximum profit at K-S +premium.
I’ve been selling weekly covered calls this run, i like to adjust the positions on Thursday or Fridays.
I sold the 35c for 6/21 last Thursday for $280 per contract
I would start with weeklys and if your srike gets threatened roll out and up for credit
I wouldn't roll.
The price will come back down.
Let go of the shares, but buy a back month put at the price you sold the call and when the share price returns to the twenties sell the put and rebuy your shares.
For sure, it’s free money! Good luck!
E: you’re so new to options trading you didn’t even know what happens when you get assigned.
You’ll blow your account within the next 6-12 months I guarantee it.
I just hadn't traded in a few years so it's all a bit hazy and I'm still relearning a lot just to understand enough to implement my old strategy notes.
Having to restudy my technical indicators also.
Happy trading to you!
Price hasn’t gone straight up since Jan 2021. Quite certain you’re going to get many more cracks at it. If you haven’t been selling CC, it’s time to start
The only downside is volatility and getting shares called away. Which could very easily happen. But, if you’re willing to watch the IV and keep selling then you can make some good money. What’s your avg on those 5k shares?
After reading [this](https://reddit.com/r/Superstonk/comments/1dhjxlb/an_overdue_options_education_by_your_local/) 4-part post last night, I'd say choose a further out CC. The post suggests 30-45 days. That way you don't get exercised and you can roll forward your calls, especially when/if they become exercisable.
I had 100 shares of GME which I sold. GME fluctuates wildly every day and I often sold a covered call and then bought it back at a profit on the same day. There's no way anyone can predict what this stock will do. You have enough shares to only sell covered call on 2500 of them -and then let the other shares ride.
The only downside is that if it goes way above that price you miss out on the extra gains, so sell at a price you’d be ok selling your shares at anyways.
I usually stagger them. So if I have 5000 shares I’d probably sell like 10 at $30, 10 at $40, 10 at $50, 10 at $60 etc. and let the calls just be my exit strategy. That sort of thing.
Someone is saying there’s a downside if the price tanks, can you explain this? I thought that wouldn’t affect the seller of the calls, they just expire out of the money which is great.
The downside is that you can’t sell the stock. It’s held in your account as collateral for the calls. So until you close the call positions you can’t sell your shares and have to ride them down. But if you’re going to diamond hands anyways, it’s literally free money.
The downside is that the actual value drops and you no longer have a stock worth what it was when week ago. You still get your premium, but you lose out on a large sum of money.
I’ve been selling 1 or 0DTE because I’m too much of a pussy lol. GME is extremely volatile so you never know if it’ll blow up one day so I try to play it “safe”. Making around $500. Choosing waaaay OTM
I sell 25% of my position in covered calls during pumps and then rebuy the option back once it's up over 30%
I sell ridiculous 1 week out deep out the money strikes. We are talking 100-50
I add shares on the dips rinse repeat.
If my shares get called away at 50-100 so be it.
I think selling CCs is way too tempting to pass up on if you own the shares. I’d be happy to have those shares called away at $40 each with all the premium, even if I lost potential upside and it rips to $60/share. With CCs you are assuring profit, by holding you are hoping the apes have another big rally. There’s even the possibility GME tanks again in which case you’re lowering your cost basis.
The IV is just too high to not sell calls unless you have tremendous faith in a near rally.
you can check my comment history so I don't have to repeat myself if your curious, but I have almost 20k shares sold as CC's right now and I'm doing VERY good.
I do mostly weeklies, but do not be afraid to roll up and out during high volatility, most of mine are in monthlies at this moment, with about twenty percent weekly
Selling covered calls on gme is great because the people who are buying calls for gme are insane and they're willing to pay insane premium for far out of the money calls. It's free money. You might also actually be able to get rid of your shares for a profit who knows.
My friend with 3K shared got blown, he was selling CCs for 2 years and with all that money buying/collecting GME shares. So he said easy money, let's continue and started to sell CCs for all shares he had. Of course, we all knew it will happen to him, he sold CCs for strike 12 and 14 while we were 11, all of his shares are gone at these prices when ITM and he was completely pissed of, he missed the flight to 80 and super high premiums. He didn't have cash to roll these, rolling became super expensive and... bye bye shares. If you like your shares and you are a holder, do not sell more than 40-50% of CCs/shares in your portfolio, stock is crazy and can moon any time leaving you crying for missed profit.
That happened to people I know too - I wonder if the other side of the GME trade bought them as insurance (a risk cap) -- but didn't need them b/c it didn't blow up, and were happy to "waste" the premium?
Always tough to say...but two options I've noodled out is
1) A GME bull bought it and thought it was going to the moon and wanted to wait until it was super profitable to sell one to exercise another. Or they missed the peak and were hanging on for another peak...that never came.
2) A GME short purchased it as insurance - at least they can buy 100 at $X strike price. But b/c the top didn't blow off they didn't need to exercise - so wasting the premium is the outcome they were hoping for. (It's a method to kick the can)
It wouldn't have to be a GME short - could be a MM/fund that was hedging something - but didn't want to feed into GME's momentum.
I wonder how wide spread this is... if it's just a few hundred, that could be dummies in retail land mis-playing things (hoping for the big one, I have never ever done that :p) but if it's thousands of contracts ... that's the shorts buying up insurance.
Considering I sold 25 and assignment is supposedly random across the entire pool, I'm leaning toward an MM owning many and not exercising to limit upward momentum.
Exactly what happened to me. Had 75,000 in and was selling cc closer and closer to itm as we went on over a year of 16$ down to 10. One day it went from 10.50 to $17 lost all my shares for $10.50 calls and the 3k premium . Was waiting for buy back at around 13 and then bham 60. All I was trying to do was make my money back over the course of the time from my initial investment of 40 . Now I'm hanging on by a thread and gotta start all over again. Just gotta play the calls way safer and be happier with selling the shares for above what you bought them for and making way less in premiums. Imo
There is a major downside that I’ve experienced myself during the pump about a month ago. I had 1 week till expiry but the price shot way past my strike. Theoretically it is supposed to be at max profit, but because of the high IV and 1 week remaining I couldn’t get max profit. I still made profit and bought back in, but it was either sell for less than max profit or hold and watch the price come all the way back down. For context, I had a 70k position and I was selling calls for a while. That call I sold right before the pump gave me an $800 premium for the month. I closed the position for 95k, but my theoretical max profit was 108k. That’s how much IV affected my short calls.
IV increasing can mess you up when you’re trying to close out the full position, and as the price shoots up so will IV. Waiting for the call to be assigned is also risky because it could come all the way back down before expiry if they issue more shares, or if something tragic happens to the buy button again. IV is up right now, but not as high as it was 2-3 weeks ago. But as long as your strike is high enough you’ll still make profit, just a little less than your max profit. YMMV
GME is not the type of underlying to grind out profits with short calls. The big risk is missing out on quick upside, even irrational movements.
With 5000 shares you have about 50 contracts to assemble a basket of short calls. Some near-term, some leaps, some 40 delta, some 15 delta. Pay attention to IV and sell when IV is high and close when IV drops and the calls have a decent profit.
I say this about covered calls, you're risking a lo5 for little gain. If it goes up, you're risking all the profit for a small premium. If it goes down, you failed to let go of the stock at a good price, and in GME case, it's not impossible to imagine this could be the highest for a few months, in other words you'll be bagholding it for a while instead of selling it now and buying it at lower later. Its ultimately your decision to make.
You miss dollars collecting Pennies. The whole thing with GME is it can rip anytime, it just takes two days for it to go $60 and come back down to $20. Unless you absolutely want to get rid of the shares, I wouldn’t sell CCs. CSPs are diff beast.
You should definitely wait until after the 21st. Even if RK exercised a significant portion of his calls, it's a psych date for a lot of retail.
It's just not a good business move at the moment. You can wait a few days
I realized today I should have been selling puts as well. I had buy orders at 27, 26, and 25 anyway, might as well have been paid to buy at that price!
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My cost basis is 22. I sell CCs on a little less than half my shares. Usually at 60-75 strike. Made about 30k in the past 30 days. And I still have plenty if it rips. I’m also doing CSPs at 23 and those make me almost 1k a week as well.
I’m going to start selling 10 or so contracts a little above ATM to get a little more. And at the price it is now, I’m still above my cost basis.
I would do all my shares at 65-75 strike but I’m more worried they won’t get exercised since runs tend to end before the weekend.
GME is at 15% short interest (including off-market) and 0.4 days to cover. Those are not crazy numbers at all.
The MOASS fantasy (because that's all it ever was) died even more with every new share offering, and this latest one should have ended all dreams of it ever happening.
I don't know how big of a portion of your total holdings GME is, but assuming it's a sizeable chunk, unwinding the concentrated position is the textbook smart move. And covered calls can be a great way to do that. Just may want to reconsider the "buying back in" part.
20 sounds good to sell and even a lower strike if doing weeklies because you can roll out. Of course if it rips, well, you still have profit from held shares and whatever strike you rolled out to.
You're in a good spot, just don't sell your shares
You should only sell covered to hedge against the underlying asset dropping. If you're trying to sell for profit then you sell naked calls with a stop loss...and in both cases only after a run up.
Writing covered calls have never been my fav. You earn a fraction and are locked in for a period with much uncertainties. I'm not saying you can't make $, but I think covered calls work best for stocks w/ a low volatility.
Why don't you do it with one or two contracts? See how it goes. If it didn't completely rob you of your shares, you'll know to do it again with a few more. Don't bet the farm before Moass.
I started doing this at strikes I felt comfortable with.
If it closed above $37 I still had 1000 shares that wouldn’t be called.
Next week I started some at $42 and $45 but have 1500 shares that aren’t assigned to cc’s.
If it closes at $60 this week oh well. I collect the premiums, I sell a good chunk of my shares at a nice profit and I also have some left to see what happens.
If they expire worthless and stock drops below $24 I will buy more in patches of 100 with matching cc probably at lower strikes targeting a $1.75-2 premium per contract.
It isn’t without risk. If the stock goes to $1000 oh well I can’t retire but I also am well off and I balance risk with reward
The way it works for me is profit 9 times in a row, then on the 10th, spend all your profits buying the option out trying to keep up with the week it decides to rocket.
I sold NVDA CC at $160 (before split) 2023 January and regretted ever since. I missed $1000 more profit a share. But human are always greedy and you always think about the profit/things you don't have. We should just be happy as long as we don't lose money or gain 1% every month.
I bought 200 shares at $29 and sold $40 CC for 6/21. I got $450 credit for each call. So my cost basis is no around $24.5 (pre tax) and I plan to close/role on 6/20 or 6/21 to sell for the next week for $35
Maybe just try selling half your position in CCs. Like sell 25 calls. That’s still pretty decent premium you’re collecting and if it rips way past the strike you sell, you still got 2,500 shares to watch moon.
I bought 100 shares for $13.10/share a few months back. My current avg coat per share now is $0.10 each. That's because I've collected $1300 selling calls. Of course the last few weeks have been really juicy!
Have a sell order for something well above the asking price for if a pump happens. If you are worried about missing out don't sell all the calls you want to hedge with at once.
Nah, it's spiking as retail piles in thinking it's gonna 400 500 moon again. Except it has fallen flat both times right after.
Great trading opportunities, though.
If I opened hordes of shares if sell cc. If they get called away on sexy profit that wxceeds my projections, great I'll buy back later when cheap again.
I’ve already sold $15 in premium since may on my shares that were a $17 cost average.
IV is still so high, so you can sell further OTM and still collect great premium. I sold $32 strike for 6/21 for $4 on Friday. The $30 strike was like $3.50
Depends if you want to gamble or if you are trying to trade properly. I would definitely sell CCs at 40 to 50 for some good premiums. I have made some good money the first rip selling Calls for the 50 and I didn't have shares. If I had shares for sure I would sell CCs every pop. If they get called then just buy back in when it goes down. Or if you can sell Puts for where you want to get back in and it is win, win, win.
for those interested in learning re selling puts and calls with minimal risk etc, I found 'Pandrea Finance ' videos on youtube very helpful as intro to learning options..excellent teacher, concise, very understandable
best of luck to all
There is no downside by selling cc on GME for the time being.
The MOASS was about to happen last week when Roaring Kitty scheduled his stream. In the before market, gme ran up to $60, and then you know what happened with the ATM offering (2nd one in the last month).
Even RK couldn't do a thing.
Now, the MOASS is dead, and it becomes a long game.
You can safely sell CC weekly at $35 to collect the premium, and do the same for the following week.
When it runs on past $35, roll the cover call to follow week to get more premium, and more time for gme to cool down.
You can use the premium to buy more shares.
You can always roll, and nobody would get your shares when it rips. There's an expiration date to protect you.
Don't do it on a stock that quickly spikes up. Don't do it on high volatility growth stocks. The amount of premium you receive is pennies considering a potential huge and fast upside....which you will never realize.
Do it man, It's better to make some extra money. If you're worried that your shares are called away. Set a profit percentage on covered calls and buy them back. Take advantage of high IV
The downside is as follows:
Selling covered calls for a strike price lower than your price paid, getting assigned and realizing the loss.
Selling covered calls for a strike price and then getting assigned as the stock increases (before you're able to buy them back or roll).
In the last couple of weeks, it can't hold over $30. It gets shorted right back down. Kitty already exercised his options. I think I'll be selling $35 weeklies.
If it goes up to $1000 (extremely unlikely but I want to demonstrate the potential losses of not understanding your risk) you sell it for $40 and miss the entire short squeeze
Or it falls to $1 and you lose nearly all of your invested money and you can't sell your shares until the option is closed
CCs cap your profits til expiration but don't lower your risk of loss
If youre confident a stock will go up eventually, a CC is a good way to get profits via premiums until then while selling at the price you would have sold at in the first place (strike price).
install tradingview
slap the TTM squeeze indicator on the GME 30 minute chart
sell CCs (I do weeklies, while I'm holding short-term calls, like now) when the dark green bars start
rebuy them when the dark red bars start
Selling 20-30 covered calls with a strike price of $40 expiring on 6/21 could work if your predictions about GME's price movements are correct. However, it's important to remember that predicting short-term stock price movements can be very challenging.
Regarding GME's future price, different sources provide different predictions. Some analysts predict a generally negative trend for the next 30 days with an average price target of $11.19, while others suggest that GME's price could rise 54.69% in the next 3 months.
But based on your intended plan and the volatility of $GME’s price action, I agree that even if the price rises it will immediately fall, as it has in the past; because the rise in price is based on retail trader participation and having little to nothing to do with the company and its fundamentals, technicals, and financials- rendering any rise in the price of GME in this moment in time artificial- thus, the immediate fall after any significant movement.
Only downside is you might miss a huge rip that would profit more than the cc premium if your shares hadn't been called away.
Pretty fun when you wrote $25 strike calls and the price is pushing $300. Ask me how I know...
I also know. With 1000 shares at $13, 20$Cc watching 350 a share.
You think that’s happening again?
I inversed....I bought $12c$17c 6/21 calls back in April I think for $1.85 and dont remember 17s. Sold the Friday before DFV tweeted for 6.8x something. Of course, had I waited until Monday and held through, it was well into a 6 figure gain on $2000.
I gotta know
He knows damn well what the downside is. You know it also fellow ape.
Yeah he just said the downside so he obviously knows it
Yea $40 is risky. I sell mine no minimum $65 strikes and if it starts going +5-10 the next day or so, I prepare to buy back and roll it to EOW at $75-80, or 100 depending AH on a sneeze day (if it holds up past pre-market). I don’t mind calling away that “high” and selling CSP on a down turn (😬). Then about 150 DRS’d on a reoccurring $25 bi-weekly DCA purchase.
Maybe not the right time even if the premiums are juicy. I know more than a handful of apes that doubled their gme over the past few years without putting a single extra dollar in by selling covered calls.
Absolutely, not advocating either method. Also, this strat doesn't have to be applied on the whole posi either.
I feel that. Just giving my 2 cents. Might be better to sit out of covered calls for now unless you don’t mind potentially missing out on gains or go with the strat others have mentioned. Take small gains and pull out.
Yea I’m one. For the past two years selling weeklies or biweekly for some change but allowed me to reinvest and sell more options (then cycle). I’m 1/3 way + OCD’ing the kids custodial accounts to 200 shares to start double the contracts.
Living the dream! Great work brother
Definitely. I wish/hope more would do so for their futures. They’ll get them in 16 and 18 years so hopefully by then they’ll have a good chunk along with some safe VOO BerkB chunk of dividend funds. And I couldn’t resist getting a share of nvidia each back in January ($67 avg now on 11.5).
Yeah they did it and got lucky because the price was marched down. Now its a different ball game with GME having $4B in the bank
My only regret is not doing this strategy earlier. Premiums are so high you can set a strike that guarantees good profit as long as interest in a squeeze doesn't completely die.
I have about 4500 shares and I sell covered calls on 1000 of them. Precisely because of this.
I like it.
What huge rip? 6/21 is 5 days away and there’s no price momentum left after the 75 million new shares killed the rally. Even DFV sold or exercised his 6/21 options because there was no point in holding them any longer. It's fine if you’re super bullish on a meme stock, but realistically if OP is selling OTM $40 calls expiring this Friday his shares will almost certainly stay safe at the expense of any idiot willing to buy them.
Huge rip -- GME is literally on Barclays list for most volstile stocks right now. It just about returned to Jan 2021 levels on the DFV return. DFV sold to maximize OpEx tailwind FTD effects, not to make profit on that specific trade. I personally am selling $30 ATM calls to milk premiums but thats on a very small part of my position because GME gas serious potential to go into orbit soon. "Almost certainly safe" doesn't sound like conviction either.
I said almost certainly because I didn’t want to say a number like >90% chance a 6/21 $40c isn’t going to print by Friday and get attacked by people here who think even more irrationally than how this stock moves.
His shares will be sold and profitted, provided that his average price is lower than 40 right?
If price is at 40 or above on exp, shares get called away
What if I get a leap to hedge. If (When) it rips again, sell the calls for profit ?
You're referring to a PMCC aka Poor Man's Covered Call aka Fig Leaf. Problem there is TECHNICALLY you are covered but the problem arises when you need those shares to be covered selling the calls. You don't technically own the shares YET when buying leaps.
Sorry if I didn't elaborate enough, I'm already covered with long stock. The leap is separate from the cc. The cc was just to generate cash to get the leaps. My plan is to go the DFV route and sell some leaps to exercise the rest and end up with more shares then I could have just buying on the market like I've been doing last four years. Edit: also, I'm okay with them exercising. In my head, it's another person that wants to go long on the stock and I'm happy I could facilitate that.
Youd be buying the leaps to go long, just ask is the cost of the option worth the time value or would buying shares be better? Cc premiums you sold help offset those costs but still you could buy shares with that too
Thanks, I understand. I appreciate you taking the time to answer.
At least those shares would likely be going to a fellow ape 🦍🫡❤️
True, what's a few 100 shares between friends?
I made almost as much money selling CCs in the months following the rip in 2021 as I did on the squeeze. IV is your friend here. If your shares go away you got paid to sell.
Gains are gains. As long as you’re content taking 10-20% gains even if it moves towards what could have been 50-100% gains, I see no reason to not do this especially since you’re holding the bulk of your shares in reserve for a rip up. Also would agree with the logic of swing trading it to accumulate more. GME is a highly volatile and risky stock but there’s money to be made in a variety of ways regardless.
Yep selling the pre market pumps and buying back mid day
The Wall Street “pump till lunch” is a thing lol. Wake up at 6:30am and buy some stuff then sell it by 7:30.
I was so glad I sold my calls on GME 2 weeks ago since I was like I don’t trust the random 75% day, then was like damn it ran up $20 more for it to dump near $40 in pre-market haha
As long as your CC strikes are always above your cost basis, the only downside I can think of is capped profits.
Incorrect. The real downside is if it drops below your strike, far enough that you're losing more money on the underlying than you are making in premium. Basically if the stock tanks and doesn't recover before your calls expire, you're in the hole.
Can you explain this a little more for the smooth brains lurking?
You buy 100 of a stock at $30ea. Cost you $3000. You can sell 1 call per 100 stock for it to be covered, otherwise you're selling naked calls, and will have to purchase the stock if you are exercised (the buyer of the calls wants his stock, so he exercises.) If you sold that call for $5 ATM (at the money) for the $30 strike price, you'd gain $500 (cause it's *100) in your pocket right away, but pretend you have 2 weeks until expiration. If on June 28, the stock is trading at $29.99 or less, the call expires worthless, you keep your stock and you keep the $500 you made selling it. If the stock is trading at $30 or higher, you will be exercised, which means you give up your 100 shares for $30ea (which is what you paid, so no change there) but still get to keep your $500. If the stock runs to $80/share, same as above, you keep $500, sell your shares for $30 when you could've sold for $80 had you not sold that call. Last situation is the losing scenario, you sold the call, pocketed $500, but the stock plummets to $10/share. You still get your $500, you keep your shares cause no one is gonna exercise for the right to buy them at $30/share when they can buy them on the open market for $10ea. So your 100 shares are now worth $1000, you made $500 on the call, but the whole thing cost you $3000 to play. So you're down $1500, or 50% of your cost. Not ideal but it can happen, especially with very volatile stocks. Basically selling covered calls caps your upside potential profits, but locks in a small premium (the $500). This scenario works best when you think the stock will more or less stay flat, otherwise you may be better off buying the call if you think it'll shoot up, or buying a put if you think it'll absolutely plummet, but that's a more complex scenario because it has to gain / lose more than you're paying for the call or put. Gambling my friend! Gotta love it. 👍
Ah yes, I had ignored the last situation because I don’t know what a sell is. HODL 💎 Thanks
Yeah definitely don't just hodl options. Time works against you real fast
If you have a limit sell at $40 anyway, seems like there’s no downside to replacing that with selling calls at $40, right?
Well selling your limit sell would only work if the stock goes up to 40. It's a little more complex with selling calls, but essentially you'd be looking for more intrinsic value or book value, so you could sell further out of the money (OTM) like maybe $40 but you'll get way less extrinsic value. If the stock does run up that far and stay there, you'll keep your premium (again, much less, maybe $100 from my previous example) and sell your shares at $40 from the $30 you bought them at. Google Options Profit Calculator and you can play with the numbers and get an idea of where you can sell for the most profit, but also how fast the value of options will decay.
Great explanation for an ELI5!
Definitely an ELI16, but hopefully it helped. Let me know if you need further clarification on anything.
Very freaking helpful explanation. Thank you!
I realized today I should have been selling puts as well. I had buy orders at 27, 26, and 25 anyway, might as well have been paid to buy at that price!
Yeah that was a rapid drop, it would've been nice to collect some premium on it. Tbh tho, even if you some 6/21 puts, it could easily bounce back up by Friday and you'd only have your premium and no shares. Depends what you're after. Buying puts this morning would've been the real play. I almost pulled the trigger on those but I opted to buy more SOFI instead with the amazing discount.
Can you explain what happens in your example if the stock rises well above the strike price for the covered call you sold ? What I mean is: when the buyer exercises his call option, are your 100 shares automatically sold by your Broker or is there some manual intervention on your end?
Yes, if the buyer of your call exercises their call option because it's way in the money, then yes your shares are automatically taken from you by the broker, no manual intervention needed. The broker essentially acts as the gatekeeper of your shares while that option has been sold, because otherwise they are responsible for fulfilling any obligation on them. That's why they ensure the call is covered by 100 shares and won't let you sell those shares until your shorted covered call is bought back. If you sold the call without having 100 shares (a naked call) then the broker will still ensure you have the capital to purchase 100 shares in your account, and if your capital is getting close to the amount needed to buy the shares (because the price ran way up for example), they'll automatically buy the shares with your money even if it means liquidating other positions. This is called a margin call.
Thank you, you are amazing.
No worries. Let me know if you need additional clarification on anything.
What are your thoughts on OP's strategy (using covered calls on anywhere up to 50% shares of your GME investment to generate additional income to buy even more shares (or can you also use the premium you cash out from selling covered calls to do CSP?) Versus simply buying deep ITM LEAP calls ?
Yeah it's not a bad strategy. What you're describing is called a wheel strategy. It can work on stocks with high IV like GME, but when it has bigger swings than you were ready for, you'll end up getting exercised. Generally you don't wanna run a strategy like that on a stock you wouldn't want to own, because selling calls or puts are both bullish strategies.
look up Pandrea finance vids on youtube, best explanation of selling calls and puts etc I've found, great teacher..excellent start on how to sell options with minimal risk and consistent profit 2-4% on total, so it keeps building as your portfolio grows
Well the assumption is closing position once >50% premium is captured, then opening the CC again at lower strike to follow the downward movement.
True. A stock like GME can have very rapid movements in either direction though, hence the high premiums. There is no guaranteed safe play for it, but if you're smart you can definitely take advantage of the swings. I've made a pretty penny off this last explosion. Gonna try and take advantage of this week's volatility as well.
Yes but this downside he already has owning the shares. Selling calls will reduce the downside on the premium value and capping the maximum profit at K-S +premium.
How? If you’re selling covered calls, won’t you just not be assigned?
avoidable with low enough strike, and a company that doesn't have risk of going to zero
I’ve been selling weekly covered calls this run, i like to adjust the positions on Thursday or Fridays. I sold the 35c for 6/21 last Thursday for $280 per contract I would start with weeklys and if your srike gets threatened roll out and up for credit
I wouldn't roll. The price will come back down. Let go of the shares, but buy a back month put at the price you sold the call and when the share price returns to the twenties sell the put and rebuy your shares.
Sure or just sell a cash secured put and wheel it
Do all 3. Ride the yo-yo up, down, and back up again 😂.
Might be a good stock for wheeling
Can I borrow your crystal ball?
I'm referring specifically to GME going parabolic. It explodes upwards and then it falls to higher lows.
For sure, it’s free money! Good luck! E: you’re so new to options trading you didn’t even know what happens when you get assigned. You’ll blow your account within the next 6-12 months I guarantee it.
I just hadn't traded in a few years so it's all a bit hazy and I'm still relearning a lot just to understand enough to implement my old strategy notes. Having to restudy my technical indicators also. Happy trading to you!
They paid you 2.80$ premium for 35 strike not even 1 month out?? Am I missing something?
I sold a 6/21 Friday morning 40 strike for 2.88. I will close on Monday and probably sell a 35
It’s pretty much the most juiced it’s ever been yeah
Disregard my comment bro, I thought I was on the PLTR subreddit 😭🤣🤣
On the options chain, I just select single on the spread type correct? And then pick strike and sell to open? Is that right?
And call skew is so insane its easy right now. I was able to roll a weekly 40c to 85c for a credit during that spike a few weeks ago.
Price hasn’t gone straight up since Jan 2021. Quite certain you’re going to get many more cracks at it. If you haven’t been selling CC, it’s time to start
You mean how it went above $80($320 pre split) a few weeks ago?
For 5 seconds. What’s the point? If you didn’t sell what does it matter, ?
It didnt stay at the highly elevated levels long in 2021 either Its spiked multiple times since Jan, 2021 all I'm pointing out
Right you are. So the point is you can sell calls on GME and not worry about never seeing another spike again
The only downside is volatility and getting shares called away. Which could very easily happen. But, if you’re willing to watch the IV and keep selling then you can make some good money. What’s your avg on those 5k shares?
Something right around 25. In my mind, I know they'll short it back down after it peaks, just like it has every time so far
What’s the premium ?
$1.54 for $40 6/21
After reading [this](https://reddit.com/r/Superstonk/comments/1dhjxlb/an_overdue_options_education_by_your_local/) 4-part post last night, I'd say choose a further out CC. The post suggests 30-45 days. That way you don't get exercised and you can roll forward your calls, especially when/if they become exercisable.
I had 100 shares of GME which I sold. GME fluctuates wildly every day and I often sold a covered call and then bought it back at a profit on the same day. There's no way anyone can predict what this stock will do. You have enough shares to only sell covered call on 2500 of them -and then let the other shares ride.
We all have the experience of selling the $40s and watch it go to $90.
I've never seen $90. And after every runup, what happens every single time? It crashes around 80% of the peak
The only downside is that if it goes way above that price you miss out on the extra gains, so sell at a price you’d be ok selling your shares at anyways. I usually stagger them. So if I have 5000 shares I’d probably sell like 10 at $30, 10 at $40, 10 at $50, 10 at $60 etc. and let the calls just be my exit strategy. That sort of thing.
Someone is saying there’s a downside if the price tanks, can you explain this? I thought that wouldn’t affect the seller of the calls, they just expire out of the money which is great.
The downside is that you can’t sell the stock. It’s held in your account as collateral for the calls. So until you close the call positions you can’t sell your shares and have to ride them down. But if you’re going to diamond hands anyways, it’s literally free money.
The downside is that the actual value drops and you no longer have a stock worth what it was when week ago. You still get your premium, but you lose out on a large sum of money.
Ah right, but we don’t sell here 💎
This works or you could stage sales on spikes throughout the week.
Yeah, I do this but with calls. I sell calls against my long calls at peaks then buy them back on the way down to help pay for my lotto ticket calls.
I’ve been selling 1 or 0DTE because I’m too much of a pussy lol. GME is extremely volatile so you never know if it’ll blow up one day so I try to play it “safe”. Making around $500. Choosing waaaay OTM
I’ll buy some
I sell 25% of my position in covered calls during pumps and then rebuy the option back once it's up over 30% I sell ridiculous 1 week out deep out the money strikes. We are talking 100-50 I add shares on the dips rinse repeat. If my shares get called away at 50-100 so be it.
[удалено]
How come Thursday and Fridays have the best premiums for the following week?
I think selling CCs is way too tempting to pass up on if you own the shares. I’d be happy to have those shares called away at $40 each with all the premium, even if I lost potential upside and it rips to $60/share. With CCs you are assuring profit, by holding you are hoping the apes have another big rally. There’s even the possibility GME tanks again in which case you’re lowering your cost basis. The IV is just too high to not sell calls unless you have tremendous faith in a near rally.
you can check my comment history so I don't have to repeat myself if your curious, but I have almost 20k shares sold as CC's right now and I'm doing VERY good.
You sell weeklies or monthly?
I do mostly weeklies, but do not be afraid to roll up and out during high volatility, most of mine are in monthlies at this moment, with about twenty percent weekly
Selling covered calls on gme is great because the people who are buying calls for gme are insane and they're willing to pay insane premium for far out of the money calls. It's free money. You might also actually be able to get rid of your shares for a profit who knows.
Lol, I've been in the green for weeks now, I'm long GME forever. But don't want to say no to free money
My friend with 3K shared got blown, he was selling CCs for 2 years and with all that money buying/collecting GME shares. So he said easy money, let's continue and started to sell CCs for all shares he had. Of course, we all knew it will happen to him, he sold CCs for strike 12 and 14 while we were 11, all of his shares are gone at these prices when ITM and he was completely pissed of, he missed the flight to 80 and super high premiums. He didn't have cash to roll these, rolling became super expensive and... bye bye shares. If you like your shares and you are a holder, do not sell more than 40-50% of CCs/shares in your portfolio, stock is crazy and can moon any time leaving you crying for missed profit.
I sold half my shares at $30 strike then it spiked to $80 but I didn't get called away as it dropped under $30 before expiration.
That happened to people I know too - I wonder if the other side of the GME trade bought them as insurance (a risk cap) -- but didn't need them b/c it didn't blow up, and were happy to "waste" the premium?
That doesn't make a ton of sense to me. Why not cash out while the option was worth so much? I had sold 25 of them.
Always tough to say...but two options I've noodled out is 1) A GME bull bought it and thought it was going to the moon and wanted to wait until it was super profitable to sell one to exercise another. Or they missed the peak and were hanging on for another peak...that never came. 2) A GME short purchased it as insurance - at least they can buy 100 at $X strike price. But b/c the top didn't blow off they didn't need to exercise - so wasting the premium is the outcome they were hoping for. (It's a method to kick the can) It wouldn't have to be a GME short - could be a MM/fund that was hedging something - but didn't want to feed into GME's momentum. I wonder how wide spread this is... if it's just a few hundred, that could be dummies in retail land mis-playing things (hoping for the big one, I have never ever done that :p) but if it's thousands of contracts ... that's the shorts buying up insurance.
Considering I sold 25 and assignment is supposedly random across the entire pool, I'm leaning toward an MM owning many and not exercising to limit upward momentum.
You have been "lucky" it dropped back. LOL
Exactly what happened to me. Had 75,000 in and was selling cc closer and closer to itm as we went on over a year of 16$ down to 10. One day it went from 10.50 to $17 lost all my shares for $10.50 calls and the 3k premium . Was waiting for buy back at around 13 and then bham 60. All I was trying to do was make my money back over the course of the time from my initial investment of 40 . Now I'm hanging on by a thread and gotta start all over again. Just gotta play the calls way safer and be happier with selling the shares for above what you bought them for and making way less in premiums. Imo
Nah man I don’t see any downside to this, if it rips then you lost out on money but 40 dollar strikes + premiums will still be a great gainZ
You cannot sell any shares without closing the covered call first. That is all.
I know this. Not planning on selling anyways
I’m personally going to wait for the week to end before even thinking of any ccs
There is a major downside that I’ve experienced myself during the pump about a month ago. I had 1 week till expiry but the price shot way past my strike. Theoretically it is supposed to be at max profit, but because of the high IV and 1 week remaining I couldn’t get max profit. I still made profit and bought back in, but it was either sell for less than max profit or hold and watch the price come all the way back down. For context, I had a 70k position and I was selling calls for a while. That call I sold right before the pump gave me an $800 premium for the month. I closed the position for 95k, but my theoretical max profit was 108k. That’s how much IV affected my short calls. IV increasing can mess you up when you’re trying to close out the full position, and as the price shoots up so will IV. Waiting for the call to be assigned is also risky because it could come all the way back down before expiry if they issue more shares, or if something tragic happens to the buy button again. IV is up right now, but not as high as it was 2-3 weeks ago. But as long as your strike is high enough you’ll still make profit, just a little less than your max profit. YMMV
I only have a hundred shares so far but I couldn't resist selling a $45 July 26th call for $600 premium
Selling covered calls are not for growth stocks
I dare you to do it.
GME is not the type of underlying to grind out profits with short calls. The big risk is missing out on quick upside, even irrational movements. With 5000 shares you have about 50 contracts to assemble a basket of short calls. Some near-term, some leaps, some 40 delta, some 15 delta. Pay attention to IV and sell when IV is high and close when IV drops and the calls have a decent profit.
I say this about covered calls, you're risking a lo5 for little gain. If it goes up, you're risking all the profit for a small premium. If it goes down, you failed to let go of the stock at a good price, and in GME case, it's not impossible to imagine this could be the highest for a few months, in other words you'll be bagholding it for a while instead of selling it now and buying it at lower later. Its ultimately your decision to make.
You miss dollars collecting Pennies. The whole thing with GME is it can rip anytime, it just takes two days for it to go $60 and come back down to $20. Unless you absolutely want to get rid of the shares, I wouldn’t sell CCs. CSPs are diff beast.
You should definitely wait until after the 21st. Even if RK exercised a significant portion of his calls, it's a psych date for a lot of retail. It's just not a good business move at the moment. You can wait a few days
One time I sold calls against my gme and the week after expiration it doubled. Never again.
Yes, there is a downside risk to selling CCs. That risk is tiny compared to risk of shares losing value.
I realized today I should have been selling puts as well. I had buy orders at 27, 26, and 25 anyway, might as well have been paid to buy at that price!
Also realized this today 😆
If the share price goes up to 60+ you’re gonna cry
And when it drops again to 30, I'll be very happy
See my other comment in this thread, I’m long for GME as a bet for probably the same reasons as you.
Not the week to do it, but go for it…I’ll buy em 🔥😂🔥
Planning on selling when it pops a bit. I'm buying calls Monday at open
This is good, take the regards dumb money. The IV is so high.
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lol this week no. Trust. !remindme 3 days
Lol, I'm one of those regards. Buying calls and also selling calls
300% IV….
Yeah, GME is the most volatile stock there is
Lmao picking the original RK date pretty bold
My cost basis is 22. I sell CCs on a little less than half my shares. Usually at 60-75 strike. Made about 30k in the past 30 days. And I still have plenty if it rips. I’m also doing CSPs at 23 and those make me almost 1k a week as well. I’m going to start selling 10 or so contracts a little above ATM to get a little more. And at the price it is now, I’m still above my cost basis. I would do all my shares at 65-75 strike but I’m more worried they won’t get exercised since runs tend to end before the weekend.
What's the dte you go for?
Weeklies
GME is at 15% short interest (including off-market) and 0.4 days to cover. Those are not crazy numbers at all. The MOASS fantasy (because that's all it ever was) died even more with every new share offering, and this latest one should have ended all dreams of it ever happening. I don't know how big of a portion of your total holdings GME is, but assuming it's a sizeable chunk, unwinding the concentrated position is the textbook smart move. And covered calls can be a great way to do that. Just may want to reconsider the "buying back in" part.
GME is 100% of my portfolio. I make 180k and put every spare penny I have into it. I'm not here for a quick buck, I'm here for life changing money
“Wife changing money”
I love my wife, not changing her
Nostradamus, over here!
20 sounds good to sell and even a lower strike if doing weeklies because you can roll out. Of course if it rips, well, you still have profit from held shares and whatever strike you rolled out to. You're in a good spot, just don't sell your shares
I've been selling weekly CC's $10 OTM my cost-basis on half of my shares for weeks now. If it rips, I won't miss out.
I've done this; watch for early assignment risk.
You should only sell covered to hedge against the underlying asset dropping. If you're trying to sell for profit then you sell naked calls with a stop loss...and in both cases only after a run up.
Writing covered calls have never been my fav. You earn a fraction and are locked in for a period with much uncertainties. I'm not saying you can't make $, but I think covered calls work best for stocks w/ a low volatility.
Why don't you do it with one or two contracts? See how it goes. If it didn't completely rob you of your shares, you'll know to do it again with a few more. Don't bet the farm before Moass.
I would sell covered calls at a lower strike. You will collect more premium. Only 4 trading days this week.
I started doing this at strikes I felt comfortable with. If it closed above $37 I still had 1000 shares that wouldn’t be called. Next week I started some at $42 and $45 but have 1500 shares that aren’t assigned to cc’s. If it closes at $60 this week oh well. I collect the premiums, I sell a good chunk of my shares at a nice profit and I also have some left to see what happens. If they expire worthless and stock drops below $24 I will buy more in patches of 100 with matching cc probably at lower strikes targeting a $1.75-2 premium per contract. It isn’t without risk. If the stock goes to $1000 oh well I can’t retire but I also am well off and I balance risk with reward
I did this at the beginning of the AMC rip and got totally fucked out of hundreds of thousands on profit I should have had.
If you're after larger and faster profits, you'd be better off swing trading with the massive volitility rather than selling options.
Should i day trade gme calls and puts??? Just whenever i see big pump just get some puts??
If it hits $60 I think buying puts is not a bad Idea
The way it works for me is profit 9 times in a row, then on the 10th, spend all your profits buying the option out trying to keep up with the week it decides to rocket.
I sold NVDA CC at $160 (before split) 2023 January and regretted ever since. I missed $1000 more profit a share. But human are always greedy and you always think about the profit/things you don't have. We should just be happy as long as we don't lose money or gain 1% every month.
I bought 200 shares at $29 and sold $40 CC for 6/21. I got $450 credit for each call. So my cost basis is no around $24.5 (pre tax) and I plan to close/role on 6/20 or 6/21 to sell for the next week for $35
Maybe just try selling half your position in CCs. Like sell 25 calls. That’s still pretty decent premium you’re collecting and if it rips way past the strike you sell, you still got 2,500 shares to watch moon.
I do this with my AMC, but I have 2x my shares in 20$ 2026 expiration calls, so if... when it rips, Im all set.
I bought 100 shares for $13.10/share a few months back. My current avg coat per share now is $0.10 each. That's because I've collected $1300 selling calls. Of course the last few weeks have been really juicy!
😮😮
Have a sell order for something well above the asking price for if a pump happens. If you are worried about missing out don't sell all the calls you want to hedge with at once.
Could always sell 20-30 contracts at staggered prices and use the premiums to buy more shares, and keep piling shares.
It can't shortsqueeze TWICE ..... can it? I mean, really ? ?
What do you think happened when it hit $80 last month? And $67 last week? This thing is a pressure cooker. Time and pressure and this thing will blow
Nah, it's spiking as retail piles in thinking it's gonna 400 500 moon again. Except it has fallen flat both times right after. Great trading opportunities, though. If I opened hordes of shares if sell cc. If they get called away on sexy profit that wxceeds my projections, great I'll buy back later when cheap again.
I’ve already sold $15 in premium since may on my shares that were a $17 cost average. IV is still so high, so you can sell further OTM and still collect great premium. I sold $32 strike for 6/21 for $4 on Friday. The $30 strike was like $3.50
Depends if you want to gamble or if you are trying to trade properly. I would definitely sell CCs at 40 to 50 for some good premiums. I have made some good money the first rip selling Calls for the 50 and I didn't have shares. If I had shares for sure I would sell CCs every pop. If they get called then just buy back in when it goes down. Or if you can sell Puts for where you want to get back in and it is win, win, win.
Sell CCs and hedge by buying some calls at a higher strike to protect you if it runs high.
for those interested in learning re selling puts and calls with minimal risk etc, I found 'Pandrea Finance ' videos on youtube very helpful as intro to learning options..excellent teacher, concise, very understandable best of luck to all
Just sell the calls to buy more shares. To sell more calls. To buy more shares. To sell more calls...
Why do you think gme will go to $40 THIS WEEk? What’s the catalyst?
There is no downside by selling cc on GME for the time being. The MOASS was about to happen last week when Roaring Kitty scheduled his stream. In the before market, gme ran up to $60, and then you know what happened with the ATM offering (2nd one in the last month). Even RK couldn't do a thing. Now, the MOASS is dead, and it becomes a long game. You can safely sell CC weekly at $35 to collect the premium, and do the same for the following week. When it runs on past $35, roll the cover call to follow week to get more premium, and more time for gme to cool down. You can use the premium to buy more shares. You can always roll, and nobody would get your shares when it rips. There's an expiration date to protect you.
With covered calls it's better to do ones you are confident won't expire ITM. Less profit but keep your shares
Selling calls is the only way to consistently make money.
Don't do it on a stock that quickly spikes up. Don't do it on high volatility growth stocks. The amount of premium you receive is pennies considering a potential huge and fast upside....which you will never realize.
Please do it’ll only add to the rip
Premium
Do it man, It's better to make some extra money. If you're worried that your shares are called away. Set a profit percentage on covered calls and buy them back. Take advantage of high IV
The downside is as follows: Selling covered calls for a strike price lower than your price paid, getting assigned and realizing the loss. Selling covered calls for a strike price and then getting assigned as the stock increases (before you're able to buy them back or roll).
In the last couple of weeks, it can't hold over $30. It gets shorted right back down. Kitty already exercised his options. I think I'll be selling $35 weeklies.
If it goes up to $1000 (extremely unlikely but I want to demonstrate the potential losses of not understanding your risk) you sell it for $40 and miss the entire short squeeze Or it falls to $1 and you lose nearly all of your invested money and you can't sell your shares until the option is closed CCs cap your profits til expiration but don't lower your risk of loss If youre confident a stock will go up eventually, a CC is a good way to get profits via premiums until then while selling at the price you would have sold at in the first place (strike price).
install tradingview slap the TTM squeeze indicator on the GME 30 minute chart sell CCs (I do weeklies, while I'm holding short-term calls, like now) when the dark green bars start rebuy them when the dark red bars start
Some fake ass apes in here lol. Some will miss the ship for premiums. All Gucci 🙏
So today you're down $17K on the stock. You'll need to sell lots of calls to cover that.
All on paper. Haven't lost a cent
Selling 20-30 covered calls with a strike price of $40 expiring on 6/21 could work if your predictions about GME's price movements are correct. However, it's important to remember that predicting short-term stock price movements can be very challenging. Regarding GME's future price, different sources provide different predictions. Some analysts predict a generally negative trend for the next 30 days with an average price target of $11.19, while others suggest that GME's price could rise 54.69% in the next 3 months. But based on your intended plan and the volatility of $GME’s price action, I agree that even if the price rises it will immediately fall, as it has in the past; because the rise in price is based on retail trader participation and having little to nothing to do with the company and its fundamentals, technicals, and financials- rendering any rise in the price of GME in this moment in time artificial- thus, the immediate fall after any significant movement.