Selling Covered Calls for Extra Income
$Paychex (PAYX.US)$ As with many Stocks, if you hold a lot of shares you should always “Hedge” with Options.
Protect yourself (no matter which direction the price is going)!
Many Shareholders sell Covered Calls to either make additional Income and/or to protect their Portfolio’s Overall Value.
Selling just 1 Covered Call of the 2/18 $125 Calls on around 01/06, you would have collected $1,280. Say you sold (5) Cov. Calls, then you would have collected $6,400 in Premium.
And it’s always up to you “When” you want to buy it back?? Whenever you feel comfortable?
Most people (as myself) will usually buy it back when we think the stock is about to shoot up or at a predetermined PT.
You can either:
- Hope they expire Worthless (Then you can keep the Whole Entire $1,280 Per Contract).
OR
- You bought them back on Wed (01/26) for $20 per Contract. Then you made $1,260 Per Contract (not including Fees). If you sold (5) of them and bought them all back on 01/26, you made $5,400 (basically Free money).
You didn’t lose any Shares Nor Paid a Penny to make that additional $5,400!
Protect yourself (no matter which direction the price is going)!
Many Shareholders sell Covered Calls to either make additional Income and/or to protect their Portfolio’s Overall Value.
Selling just 1 Covered Call of the 2/18 $125 Calls on around 01/06, you would have collected $1,280. Say you sold (5) Cov. Calls, then you would have collected $6,400 in Premium.
And it’s always up to you “When” you want to buy it back?? Whenever you feel comfortable?
Most people (as myself) will usually buy it back when we think the stock is about to shoot up or at a predetermined PT.
You can either:
- Hope they expire Worthless (Then you can keep the Whole Entire $1,280 Per Contract).
OR
- You bought them back on Wed (01/26) for $20 per Contract. Then you made $1,260 Per Contract (not including Fees). If you sold (5) of them and bought them all back on 01/26, you made $5,400 (basically Free money).
You didn’t lose any Shares Nor Paid a Penny to make that additional $5,400!
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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- Market Investor since 1992.
- Options Trader (8) Years
- Crypto Trader/Hodler (2014 - Present)
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你老味 :
你老味 : yes
Dino 64 : I'm lost when comes to hedging. Watched courses just not grasping how to do it.
Chief Con Dino 64 : same