IBKR opens @ 50 or so.
- Thread starter demoship
- Start date
Is anyone still long from the IPO?
Do you think that is good now to sell Covered Calls against this stock?
signé Artes - http://www.dot-circle.net/coveredcall.html - , (french)
I did not do my homework regarding timing, but I would sell DEC07 30 or MAR08 30 calls.
I do not normally sell calls, but I buy puts to hedge stock position, i.e. first I buy hedge and then if it works as planned I buy hedged stock.
I would greatly appreciate if you can teach me about timing of selling covered calls.
When the stock go a little bit higher, at the inverted "v".
Sell the call
Never sell a call below 0.5$
Sell call that have between 20 to 45 days to expiration (moving more than longer expiration)
Sell In The Money Calls ITM, this better protect your account
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When the stock go a little bit lower, buy back the call
then when a new move high sell again the call (this may happens every 3 or 5 days) depends on the direction of the market/share
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Draw line for the channel on chart, this will help, red circle is buying back the call.. sell again at, near the top. Dont worry if You dont find the perfect point, is less important. If exercised, let do it. Buy back the stock after. May be with selling naked puts a the lower strike below the price. Ask Your broker to have permission to do covered call, and selling naked puts (with the money into the account)
See the exemple on the picture, the reds circles markeds are for the place to buy back zone. Blue high crosses for selling the covered call - 1 contract by every 100 shares.
Sell , f.ex. the 25 strike, http://finance.yahoo.com/q?s=QBOJE.X
See the attachment picture, by clicking far below
Best regards
Philippe
http://www.dot-circle.net/coveredcall.html , my data : http://www.dot-circle.net/contact.html - links farm at : http://www.linkcity.be/fr/nasdaq
Your strategy works the way you describe and for an example of IBKR.
The difficult part for me is to find at what point of time I should establish stock position, in other words how to identify the price bottom.
Also, what rules do you follow in case if stock which you bought gradually declines further, and premium of calls you bought while it was declining are becoming cheaper every day? Buy more and hope it will turn around some day, or sell calls and stock for loss?
To entry, it may interresting to sell naked puts at lower strike price. exemple, with a portofolio of 12500; keep the money into, and sell 5 naked puts strike 25... collect the premium, buy back the short puts when the stock move higher , again and again.
When in position, with stocks, and, if the stock decline, just sell more deep in the money CALL options, this protect the account, buy back and again and again, even more deeper if needed
You have not to bought calls, just selling calls that You have not.
Selling covered calls is a technique, You dont need to buy it first,
STO, this is Sell to Open (a position)
Do not make mistake, NOT BUYING CALLS OR PUTS, just sell it / selling covered call. You just BUY BACK After Selling, when the price decline. If not let's exercice Your stocks... then again sell Naked Puts
Call me , it may better by phone... http://www.dot-circle.net/contact.html skype: phsplingart