New to Options

[JSOP]

No options on RBLX yet.
Covered Calls are pointless - you end up selling the shares at a discount to the current price.

Yeah there are, just monthly ones.

 

[OptionsOptionsOptions]

Yeah there are, just monthly ones.

OK .... Yahoo Finance isn't showing them.

 

[JSOP]

OK .... Yahoo Finance isn't showing them.

Yeah I see it in my trading platform. Yahoo Finance I guess is slow in getting all the option chain info.

 

[Trying2Make$$]

No options on RBLX yet.
Covered Calls are pointless - you end up selling the shares at a discount to the current price.

just come out today

 

[KINGOFSHORTS]

Bought 400 shares Roblox at $64.5, someone told me I could make money selling premiums, so I research some about this and is it called covered call? but going to my etrade account and option covered call is I will have to buy 100 shares and "sell Open" 1 call option, should I just delete the 100 shares and keep the "Sell Open" say 4 call option for April 95 $4.5, is this right?

Thanks

but what happens if you do that and RBLX gaps down friday to 30 dollars a share. Hows that selling premiums easy money plan going to work out.

YOU You paid 645 dollars for stock worth 3000

Thanks everyone, esp BK and Gary and Yes MrMuppet I will read more on this but no books will ever replace actual experience ..my roblox sell target is 90-100 so If I Sell to Open @95 "If you hold these till expiration in Apr., you'll keep the $1,760 if price of RBLX closes above 95 but your shares will be called away at the 95 price." then I am happy but happier it it closes under $95 so I can repeat the process ..worst good thing can happen is I sell for $95, collect the premium, stock goes back to $65, buy it again and repeat process ..hope I said that right

but what if something happens on monday and stock plunges to 20 dollars a share? What next? Why on a company that loses money.

 

[KINGOFSHORTS]

Look just stick to SPY etf at least its a basket of the big 500 multinationals backed by the Federal Reserve and US govt.

go sell the 390 puts expiring april 19 at least if you get put stock to your account its something you can hold on to unlike some shit Roblox meme stock that loses money and will be worth zero and does not pay dividends like SPY

And add some black swan insurance and buy the 330 April 19 puts. Just in case if we go to war or covid 2.0 strikes or aliens invade you have a max loss floor on that position.

7.14 - .62 and you get 652 buck per spread. 10 contracts thats 6520 USD. Worst case you get SPY at a discount and outperformed the market for the month.

 

[antares66]

Yes, you can sell 4 calls against your current position (400 shares).
Just use the standard option trading tool rather than covered call since you already own shares.
Under options, use "Sell to Open".
If you sell Apr. 95 Calls:
You collect $4.40 x 4 = $17.60 x 100 = $1,760.
If you hold these till expiration in Apr., you'll keep the $1,760 if price of RBLX closes below 95 and you'll keep your shares.
If you hold these till expiration in Apr., you'll keep the $1,760 if price of RBLX closes above 95 but your shares will be called away at the 95 price.

Well explained. But i ask myself, is this in general a good business? If the stock price stays below the strike, you can keep your premium (calls expire worthless), but in case of a falling price your 400 stocks will lose value. And the loss of value could exceed the premium you got.
The best scenario would be the stock price goes higher but doesn´t reach the strike, so you could keep your premium and your stocks gain in value. Or do i misunderstand something?

 

[BKR88]

Well explained. But i ask myself, is this in general a good business? If the stock price stays below the strike, you can keep your premium (calls expire worthless), but in case of a falling price your 400 stocks will lose value. And the loss of value could exceed the premium you got.
The best scenario would be the stock price goes higher but doesn´t reach the strike, so you could keep your premium and your stocks gain in value. Or do i misunderstand something?

You're correct in your view but if you're not comfortable owning the stock then you shouldn't be doing a covered call. If you like dividends, this is another way to create a dividend as long as the stock doesn't reach your short call.
More than 90% of my portfolio is covered calls. If the stock looks like it might reach my short call before expiration then I roll it up & out if I don't want to be called away. At some point the calls will expire worthless or I'll get called away.