Charles Schwab misleading (ie. straight out lying) about Covered Call trading?

There is an example which states:

  • The stock can drop two points before you go into the red. Losses will be incurred below $70 to zero.
Stop arguing about the hidden evil in semantics. Are you guys high? Maybe your suffering from losses and looking for a bogeyman.
 
earth_imperator said:
Read the last sentence and verify whether it's true. If stock declines then the position goes towards total loss. But the text says different.
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I'm not sure what part you're saying is bs, is it the word "should"?

Reason being, and I don't know if this is why Schwab used "should", but my guess is that there is one obscure exception, quarterly options on SPX expire on Thursdays, but the $ amount used to calculate the expiration price is the first print of SPX on Friday morning. I realize you're talking about a stock here, but Schwab's choice of verbiage might be related to this.

I'm not 100% sure, but the call someone sold that appeared to be worthless on Thursday's close, could go into the money if the SPX gaps up overnight and the 1st print is much higher than the last print on Thursday.
 
engineering said:
Nonsense. Schwab's is clearly that it is talking about the value of the OPTIONS. Of course the value of the stock covering the call goes down when its price goes down, but the text clearly states the option not the position.

I advise that you stay away from options.
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In arbitration Schwab would win. However, if Schwab is trying to avoid misunderstanding with clients, it would state when losses occur in the position
 
I am continually amazed at the knowledge, curiosity, scholarship, humility and overall intellect demonstrated by this group of "elite" traders. It gives me confidence in my ongoing ability to extract profits from the market, indefinitely.
 
jys78 said:
I am continually amazed at the knowledge, curiosity, scholarship, humility and overall intellect demonstrated by this group of "elite" traders. It gives me confidence in my ongoing ability to extract profits from the market, indefinitely.
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why? You aren’t trading against the OP. He’s poor. You are competing with hedgefunds to trade against market makers who are biasing their quotes based on the massive flows of pension funds.

in my 20 years of trading only once have retail flows ever been a significant source of alpha in the options market and that was in 2020.
 
newwurldmn said:
why? You aren’t trading against the OP. He’s poor. You are competing with hedgefunds to trade against market makers who are biasing their quotes based on the massive flows of pension funds.

in my 20 years of trading only once have retail flows ever been a significant source of alpha in the options market and that was in 2020.
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People are people and there is nothing new under the sun.
 
earth_imperator said:
Is the brokerage firm Charles Schwab misleading (ie. straight out lying) about Covered Call trading:

I think this is total BS what that brokerage firm writes above, isn't it?
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Do you know how many people use Charles Shwab, and do you know for how long they have been around?

Don't you think that if they were intentionally, or even accidentally, been "misleading" their clients about something as simple as a covered call that they would have been discovered by now? Fined? Been forced out of business?

Perhaps it is you who is misunderstand what you are reading. This is not the first thread you have been befuddled in about covered calls.
 
It seems like OP is trying to learn options trading, and has suffered great difficulty in comprehending it.
just see the numerous new threads he has created.

it is not the end of the world; just trade stocks/futures outright.
 
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