option trading question

[evan20002]

Hi

pls help on option trading:

ex:
buy in one hand of ABC stock (10.98) 2000 per hand
paid 21960

sell out $10 call, get premium 2180 (1.09)
sell out $12 Pull, get premium 1980 ( 0.99)

the option will hit and I will sell my stock out.
what my goal is to get the max of premium

total 4160, around 18% profit

then, next month, I will buy another stock and repeat it again.
Is it workable? any issue i do missing?

handling fee : not counted
max risk : the stock ABC drops alot...

after 12 months, I will get 49920
is it possible?

Evan

 

[rocky_raccoon]

Quote from evan20002:


...
after 12 months, I will get 49920
is it possible?

Evan

It is possible but not likely.
Your ABC stock must stay at a certain price level at the expiration time and not move far from that level either way. So, yes, if you find a stock that can cross that same price 12 times a year at exact days you could make your numbers.

 

[Bry]

First, if ABC is at $10.98, and you sell a $10 call for $1.09, you have only made $1.09 - 98 cents= 11 cents, or $11 per call. This is because there is a 98 cent difference between your stock price and call strike price.

Second, you cannot sell puts as part of your plan. That is a completely separate situation.

 

[Thomas012]

How to earn money with binary options?

Every trader enters the trading markets with the objective to earning profit. If you as a trader have not been able to earn good sum of profit in traditional trading platforms then you must give a try to binary options trading. It is a reliable and safe trading option that is easy to follow, which help earn high profit in different financial markets. As a trader, you can easily earn huge profit, even if you do not have any prior experience of trading.

Binary options allows traders to earn huge profit by making prediction related to future position of the securities or assets considered in the asset. The binary trading is becoming largely popular among new as well as experienced trader owing to its high return rates on lower investment, which is not possible to earn through traditional trading. With binary options trading platform, a trader can earn from 71% to 81% on his investment in a span of an hour or a day; however, the prediction of the trader regarding direction of asset price must be accurate, at least by 0.001 percent. There are generally three types of trades available with binary trading options .i.e. range options, touch options, and higher and lower options.

thanks

 

[probe1957]

Quote from Thomas012:

As a trader, you can easily earn huge profit, even if you do not have any prior experience of trading.

Let me guess. For a fee, you will tell me how?

 

[Bry]

Hi OP,
I thought about it some more and realized you wanted to sell puts after getting cash for your covered call position. Once again the profit you think you receive is much more than reality because you need to subtract the difference between your strike price and stock price.

Usually sellers of covered calls look for the most profit by selling calls slightly out of the money, so at 10.98, you would want to sell 11, 11.5, or 12 calls. Remember, if your 12 calls were assigned to you, you would sell your stock at $12, thereby earning the option premium and $1.02 on your ABC stock.

Another risk associated with selling covered calls is that the stock goes way up in price and the covered call seller misses out on the potential profits. Say your 12 calls get exercised but the stock goes to $15, another $3 of profit was missed.

I hope that helps.