Comments on: My call was called http://www.livelearninvest.com/my-call-was-called/ Living life to its fullest by generating passive income through investments Thu, 02 Feb 2012 03:11:13 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: monarchcrest http://www.livelearninvest.com/my-call-was-called/comment-page-1/#comment-15 monarchcrest Fri, 06 Jan 2006 15:59:00 +0000 http://www.afterreadingrichdadpoordad.com/?p=43#comment-15 Another thing to think of, if it only is exercised $0.20 in the money, go ahead and buy it back immediately, you're only out the commission but you still made money on the call. Another thing to think of, if it only is exercised $0.20 in the money, go ahead and buy it back immediately, you’re only out the commission but you still made money on the call.

]]> By: monarchcrest http://www.livelearninvest.com/my-call-was-called/comment-page-1/#comment-14 monarchcrest Fri, 06 Jan 2006 15:57:00 +0000 http://www.afterreadingrichdadpoordad.com/?p=43#comment-14 If the call is in the money (after commissions) it will be exercised no matter what. My friend had one that was for a total of $1.50 after commissions. The brokers will glady take that $15 for them, even if it only makes you $1. BTW, I've been buying GOOG options and doing fairly well, but its a roller coaster. Bought some AAPL options today. If the call is in the money (after commissions) it will be exercised no matter what. My friend had one that was for a total of $1.50 after commissions. The brokers will glady take that $15 for them, even if it only makes you $1.

BTW, I’ve been buying GOOG options and doing fairly well, but its a roller coaster.

Bought some AAPL options today.

]]> By: Shaun http://www.livelearninvest.com/my-call-was-called/comment-page-1/#comment-13 Shaun Fri, 06 Jan 2006 15:19:00 +0000 http://www.afterreadingrichdadpoordad.com/?p=43#comment-13 Yeah, but I'm not so sure about that. The last time I sold covered calls was maybe 5 years ago. At the time the call expired, they were barely in the money. I think I sold them for $0.50 and the stock closed at $0.20 over the strike price. I figured I wouldn't get called since whoever bought the calls from me was still underwater by 30 cents. Wrong. I was called anyway. I did some more research and it turns out that my broker (at the time, this was E-Trade), randomly picks whose calls are called when an option expires in the money. So the person I sold the calls to might not have been the one who bought my shares. Now it may be different for different brokers, but it's something to keep in mind. Even if you sold an option for $3 and it expired in the money by only 10 cents, you still might get called. (Of course, this is actually good for you, since you effectively sold your shares for $2.90 over the going price...) Anyway, I think I'm going to go ahead and see if I can sell some calls and pick up some extra money.. Yeah, but I’m not so sure about that. The last time I sold covered calls was maybe 5 years ago. At the time the call expired, they were barely in the money. I think I sold them for $0.50 and the stock closed at $0.20 over the strike price. I figured I wouldn’t get called since whoever bought the calls from me was still underwater by 30 cents. Wrong. I was called anyway. I did some more research and it turns out that my broker (at the time, this was E-Trade), randomly picks whose calls are called when an option expires in the money. So the person I sold the calls to might not have been the one who bought my shares. Now it may be different for different brokers, but it’s something to keep in mind. Even if you sold an option for $3 and it expired in the money by only 10 cents, you still might get called. (Of course, this is actually good for you, since you effectively sold your shares for $2.90 over the going price…)

Anyway, I think I’m going to go ahead and see if I can sell some calls and pick up some extra money..

]]> By: monarchcrest http://www.livelearninvest.com/my-call-was-called/comment-page-1/#comment-12 monarchcrest Fri, 06 Jan 2006 15:00:00 +0000 http://www.afterreadingrichdadpoordad.com/?p=43#comment-12 You can always sell calls at a price so high that they will probably never get called. The downside is that they're only worth a few pennies. You just have to strike that balance of risk of it being called and price per option contract. You can always sell calls at a price so high that they will probably never get called. The downside is that they’re only worth a few pennies. You just have to strike that balance of risk of it being called and price per option contract.

]]> By: Shaun http://www.livelearninvest.com/my-call-was-called/comment-page-1/#comment-11 Shaun Fri, 06 Jan 2006 14:39:00 +0000 http://www.afterreadingrichdadpoordad.com/?p=43#comment-11 No, definitely not with Google :-)But I own SFI and it's been trading in a range for some time and I'm thinking about selling some calls to pick up some extra cash. I like the stock though and if I do get called, I'd buy it back. No, definitely not with Google :-)But I own SFI and it’s been trading in a range for some time and I’m thinking about selling some calls to pick up some extra cash. I like the stock though and if I do get called, I’d buy it back.

]]> By: monarchcrest http://www.livelearninvest.com/my-call-was-called/comment-page-1/#comment-10 monarchcrest Fri, 06 Jan 2006 03:43:00 +0000 http://www.afterreadingrichdadpoordad.com/?p=43#comment-10 I sell a covered call when the stock I am in is not performing that great. So in this case EBAY was around 40-43 and I wanted to sell it anyway. I would have been happy to sell it at 43. So I looked at a 45 call on the next month which had a $1.60 price. By selling this call I effectively was saying I will sell my EBAY stock at $46.60, which was $3.60 over the price I would have been happy with. Of course EBAY could have gone to 60 and I would have lost out on $13.40/share. That is the main risk. I wouldn't do this with Google! I sell a covered call when the stock I am in is not performing that great. So in this case EBAY was around 40-43 and I wanted to sell it anyway. I would have been happy to sell it at 43. So I looked at a 45 call on the next month which had a $1.60 price. By selling this call I effectively was saying I will sell my EBAY stock at $46.60, which was $3.60 over the price I would have been happy with.

Of course EBAY could have gone to 60 and I would have lost out on $13.40/share. That is the main risk. I wouldn’t do this with Google!

]]> By: Shaun http://www.livelearninvest.com/my-call-was-called/comment-page-1/#comment-9 Shaun Thu, 05 Jan 2006 20:08:00 +0000 http://www.afterreadingrichdadpoordad.com/?p=43#comment-9 Can you post some info on your decision making process for this? I'm looking at selling some covered calls and am interested in how to determine the strike price and expiration date to sell them at. Can you post some info on your decision making process for this? I’m looking at selling some covered calls and am interested in how to determine the strike price and expiration date to sell them at.

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