(Total Views: 457)
Posted On: 08/21/2021 8:24:35 PM
Post# of 87114
Re: riskreward007 #54213
that is the risk with covered calls.
if u put up 100k shrs and sell 1000 contracts and they reach the strike price 10$ goes to 15$) you forfeit those shares otherwise forced to sell the 100k shares.
with that said.
if the timeline is short there is less likelihood for it to reach the strike price. you keep the premium for those 1000 contracts plus you keep your shares since the contracts have an expiry date.
or as LG said buy the contracts back before the strike price. you still made the premium minus the discounted cost of the shares.
if u put up 100k shrs and sell 1000 contracts and they reach the strike price 10$ goes to 15$) you forfeit those shares otherwise forced to sell the 100k shares.
with that said.
if the timeline is short there is less likelihood for it to reach the strike price. you keep the premium for those 1000 contracts plus you keep your shares since the contracts have an expiry date.
or as LG said buy the contracts back before the strike price. you still made the premium minus the discounted cost of the shares.
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