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The Power of Selling Calls (Patreon)

Published:
2023-08-15 16:56:15
Imported:
2023-08

Content

I sold a substantial number of these units at around $30 each, despite their subsequent significant increase in value. I maintained a calm approach, in line with the comprehensive analysis provided in my detailed video on the trade.

Currently, their valuation stands at 80 cents, and my strategy remains centered on allowing them to expire without value by the end of this week. My other short position involves the $400 calls, initially trading at approximately $30, but now priced at $3. The question that arises pertains to whether I should prioritize maintaining a favorable stance or acknowledge the potential for MSTR to surpass the $400 mark. Time will unveil the outcome, although I anticipate limited market activity this week.

These strategic maneuvers have considerably improved the cost basis for my SLs on MSTR, translating into substantial credits. A comprehensive review of all the pertinent calculations will be undertaken late Friday, aligning with my assessment of the overall trade situation. 😊


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Comments

Anonymous

From chat gpt: “Options trading is a form of investment that involves trading contracts known as options on the stock market. An option is a financial derivative that gives an investor the right, but not the obligation, to buy or sell a specific stock (or other underlying asset) at a predetermined price within a specified time frame. Here are the basic concepts of options trading: 1. **Call Options**: A call option gives the holder the right to buy the underlying stock at a predetermined price (called the "strike price") before or on a specific expiration date. 2. **Put Options**: A put option gives the holder the right to sell the underlying stock at a predetermined price before or on a specific expiration date. 3. **Strike Price**: The strike price is the price at which the option holder can buy (for call options) or sell (for put options) the underlying stock. 4. **Expiration Date**: Options contracts have a specified expiration date, after which the option becomes invalid. The holder must exercise the option before or on the expiration date. 5. **Premium**: The premium is the price that the option buyer pays to the option seller for the right to buy or sell the underlying stock. It represents the cost of the option. 6. **In-the-Money (ITM)**: An option is considered in-the-money if it would result in a profit if exercised immediately. For call options, this is when the stock price is higher than the strike price. For put options, it's when the stock price is lower than the strike price. 7. **Out-of-the-Money (OTM)**: An option is considered out-of-the-money if exercising it would result in a loss. For call options, this is when the stock price is lower than the strike price. For put options, it's when the stock price is higher than the strike price. 8. **At-the-Money (ATM)**: An option is at-the-money when the stock price is approximately equal to the strike price. Options trading can be used for various purposes, including speculation, hedging, and income generation. Traders and investors use options to profit from price movements, manage risk, and enhance their trading strategies. However, options trading can be complex and carries a higher level of risk compared to traditional stock trading. It's important for individuals interested in options trading to thoroughly understand the mechanics, risks, and strategies involved or seek advice from financial professionals. Strong stuff peps.

Anonymous

Can you sell calls against a long call position? Or do you have to have the 100 shares?

Anonymous

Absolutely BRILLIANT!

Anonymous

I’m new to options so i got a question. When you buy call options or put options, does another party need to buy my call or put options in order for me to sell it? Or how does it work? Can I just instant sell my option?

Anonymous

Not done this yet just learning slowly first but I'm very interested the next step to financial freedom

Anonymous
>>115316516

Somebody has to take the other side of your trade. Often it is a market maker who will price the option premium to make a profit. The options market is usually thin in the morning - best market is in the afternoon. Beware using market orders as you may get a terrible fill.