Daily Discussion post - June 10 2021

Covered calls are only “risky” if you act out and buy them back to close if the underlying goes way up and you’re FOMOing after it, or if the underlying nosedives in after hours and you would have panic sold your commons but can’t because they’re now collateral on your contract(s). Just sell at a strike above the current price that you’re comfortable with selling at by that date.

If it gives you any confidence, I sold 6/11 CLF 23c yesterday right before it went crazy, and sure I’m rooting for it to finish under $23 this week, but if it goes to $25 or something that’s fine - I still will have made plenty of profit + the premium I sold. I would have been better off selling those calls later in the day yesterday when IV went way up and premiums were juicy, but there’s no way of knowing when that will happen so I’m accepting things as they are.

/r/Vitards Thread Parent