Comments on: How Stock Options Work Series: Covered Call Writing

By: Best Personal Financial Planning and Personal Investment Articles | Personal Investment Management and Financial Planning Blog Directory

Fri, 25 Sep 2009 21:13:00 +0000

[...] presents How Stock Options Work Series: Covered Call Writing posted at Darwin’s Finance, saying, “Everything you need to know about how to sell [...]

By: Money Hacks Carnival #83

Money Hacks Carnival #83 — Wed, 23 Sep 2009 12:17:36 +0000

[...] presents How Stock Options Work Series: Covered Call Writing posted at Darwin’s Finance, saying, “Everything you need to know about how to sell [...]

By: Darwin

Darwin — Mon, 14 Sep 2009 02:25:25 +0000

Thanks for the compliment Kevin.
Mark – Thanks for the note – on #1, wording could have been a bit better – meant to convey that the $500 is yours to keep with no strings attached. However, if shares bust past the strike, the $500 could be offset by the outflow you’re going to need to buy back the option to close it out to not have your shares swept away. #2 – yes, was a bit oversimplified. Thanks for keeping me honest!

By: Kevin

Kevin — Sun, 13 Sep 2009 23:32:39 +0000

Good explanation of the strategy. Love it. .-= Kevin´s last blog ..A Fantastic Explanation of Capitalism and Greed =-.

By: Mark Wolfinger

Mark Wolfinger — Sat, 12 Sep 2009 15:00:40 +0000

Darwin,

Well done.

Two quibbles:

1) “as long as shares are below $60 upon expiration in January, you’d keep the $500 …”

The call seller keeps the $500 no matter what happens and no matter where the stock is trading.

2) “You get Paid to Wait Around and do Nothing”

Although that statement feels true, you are not ‘doing nothing.’ You are (i>accepting the risk that the stock will tumble. In your case it’s a stock you want to own anyway – but that’s not going to be true for all covered call writers.
.-= Mark Wolfinger´s last blog ..Too Many Option Posiitons? =-.