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AMZN closed yesterday at 119.94, buy 100 shares for that price and sell the 120 call for $425. If it closes above 120 the stock gets called and you sell the stock for 12000 less $5 commission. You pocket the $425 less commissions
12000 + 425 - 11994 - 15.55 = $409.45 net gain after commissions
or
Buy 100 shares at 119.94 & sell the 115 call for $735
$11999 stock cost
sell: 115 call for $735
stock gets called = $11500
11500 +735 -11994 -15.55 = 225.45 net gain
approx commissions = 4.95 buy + 5.00 sell + (4.95 +.65) option = 15.55 total
The danger is that the market takes a dive and the stock closes at a price below 112.75 (break even). You are only in the trade for 7 days or less and can sell the following Monday morning if the stock does not get called or you can sell another round of calls as OF suggests.
Thanks, I see now.
Weekly Options - CCs
Guys, it is early here in the West and I still have to enjoy my morning coffee(s) and I know there is no free money in the market but look at this - BP weekly options for example. BP shares are $35.50 this morning and 35 strike calls with just four days to live are $1.40. I know it is a long assumption but if you can do it for one year every week you get more money selling the calls than the price of the shares. And it looks like this situation is not unique to BP, other weekly are similar. F for example around $11.30 this morning, the 11 calls are 0.50, so you get around 25 just for selling the calls
I assume that gals can pay attention too?
Sorry, Otter, absolutely. Nice to hear from you!
An education please. I have sold cc,s for some time now by the month, I was not aware of weekly options. Where and how ?
Very interesting... Doesn't work for GOOG as it is just too much money.
AMZN on the other hand looks very interesting. $400 right now for the $120 call with the stock trading around 119.30
I know the price you will be able to sell the calls for will vary, but 400 x 52 = $20800 over the course of a year on stock that would cost 11930 + commission. Now that is nice if you can get it. ROI = 74%
Occasionally the stock will get call away and you may have to buy back in at a higher price or wait for a dip.
AMZN on the other hand looks very interesting. $400 right now for the $120 call with the stock trading around 119.30
I know the price you will be able to sell the calls for will vary, but 400 x 52 = $20800 over the course of a year on stock that would cost 11930 + commission. Now that is nice if you can get it. ROI = 74%
Occasionally the stock will get call away and you may have to buy back in at a higher price or wait for a dip.
I'm either too new to options, slow, or both...but are you suggesting buying the underlying, writing your call and collecting the premium, and then letting the stock get called away come expiration on Friday if it stays above the strike you sold at?
A friend of mine was just talking to me about this, he saw that a lot more stocks now have weekly options.... I am thinking the ones you are looking at this week are probably high due to it being earnings week, The earnings for F are Before Market friday.. These CCs do look interesting though...
Also look into the weekly options for selling puts, especially Amazon
Carlton, you can do this one of 2 ways. Using AMZN here is an example:Carlton Banks said: I'm either too new to options, slow, or both...but are you suggesting buying the underlying, writing your call and collecting the premium, and then letting the stock get called away come expiration on Friday if it stays above the strike you sold at?
AMZN closed yesterday at 119.94, buy 100 shares for that price and sell the 120 call for $425. If it closes above 120 the stock gets called and you sell the stock for 12000 less $5 commission. You pocket the $425 less commissions
12000 + 425 - 11994 - 15.55 = $409.45 net gain after commissions
or
Buy 100 shares at 119.94 & sell the 115 call for $735
$11999 stock cost
sell: 115 call for $735
stock gets called = $11500
11500 +735 -11994 -15.55 = 225.45 net gain
approx commissions = 4.95 buy + 5.00 sell + (4.95 +.65) option = 15.55 total
The danger is that the market takes a dive and the stock closes at a price below 112.75 (break even). You are only in the trade for 7 days or less and can sell the following Monday morning if the stock does not get called or you can sell another round of calls as OF suggests.
So I am attempting to sell a bear vertical spread on Amazon. A/H it trades for $120 so I sold the 105-100 strikes. Needs a 15% move by Friday for a return of 3.4%
Not to mention one can always sell calls/call spreads if bearish
Thanks OF . July 23 BP 35 cc 1.03 with july 23 34 put .55 . I think I am going to like weeklies.
I dipped my feet with CCs on F at 11
I am in with CC's on FAS yesterday at 20
If this gets more popular and I think it will, the trading short term is going to become more like gambling. The SP recipe of selling puts till you own it and calls till you don’t seems the only logical strategy. Bad enough being in SP’s backyard as a buyer, I think the education will come quickly and premiums for sellers will be less attractive for the short term.
I now have two vertical bear spreads. Same strikes on both, one returns 3.4% other returns 5%
The brokers must love the weeklies. Sure they will cannibalize some of the regular monthly and still the number of the contracts traded can go up 3-4 times.
TampaJake said:
Carlton, you can do this one of 2 ways. Using AMZN here is an example:Carlton Banks said: I'm either too new to options, slow, or both...but are you suggesting buying the underlying, writing your call and collecting the premium, and then letting the stock get called away come expiration on Friday if it stays above the strike you sold at?
AMZN closed yesterday at 119.94, buy 100 shares for that price and sell the 120 call for $425. If it closes above 120 the stock gets called and you sell the stock for 12000 less $5 commission. You pocket the $425 less commissions
12000 + 425 - 11994 - 15.55 = $409.45 net gain after commissions
or
Buy 100 shares at 119.94 & sell the 115 call for $735
$11999 stock cost
sell: 115 call for $735
stock gets called = $11500
11500 +735 -11994 -15.55 = 225.45 net gain
approx commissions = 4.95 buy + 5.00 sell + (4.95 +.65) option = 15.55 total
The danger is that the market takes a dive and the stock closes at a price below 112.75 (break even). You are only in the trade for 7 days or less and can sell the following Monday morning if the stock does not get called or you can sell another round of calls as OF suggests.
Thanks, I see now.
CBOE has updated their weekly options. They've added Barrick Gold (ABX), Baidu (BIDU), Goldman Sachs (GS), Potash Corp (POT), Exxon Mobile (XON).
Also looks like they took off Microsoft (MSFT)
Also looks like they took off Microsoft (MSFT)
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