Covered Calls

[Konebhar6]

5 minutes ago, rmJU72 said:

technically it’s not lending. you are just writing a contract saying you will sell the shares to someone if the price hits a certain number. you get paid for writing the contract.

Tried to explain in an easy way. All options are contracts.

[Tellugodu]

3 hours ago, Konebhar6 said:

CC - you are lending  shares you own ( say AAPL) to someone until an expiry date (  say 2/21/25) at a Strike price ( say 230). You collect a premium ($7.5 meaning $750 for 1 contract) for doing so. On expiry if price stays below 230, you get to keep all premium reducing your cost basis by 7.5/share. If it goes above 237.5 you will lose your shares. But u still made profit. You sold shares at 237.5 including premium.

Watch the video. It takes time to understand these concepts. 

Anna, in robinhood, QQQ has daily covered calls. Seems like if we are careful and not greedy, can make decent money using CC’s atleast 20$ per day with 1 lot of qqq. 

[Konebhar6]

18 minutes ago, Tellugodu said:

Anna, in robinhood, QQQ has daily covered calls. Seems like if we are careful and not greedy, can make decent money using CC’s atleast 20$ per day with 1 lot of qqq. 

Yeh. It needs too much of time investment. I have ideas which I don’t want to disclose, basically look at data previously and come up with strategies on Qqq. But needs a lot of time and daily analysis.