Over Writing, or, Unbalanced Covered Calls

[Arnie Guitar]

In my mind I've been thinking of over writing, or unbalanced covered calls...

Say, having 300 shares @ 15 and write 5 20 calls, so you're short by 200 shares.
You've got time to react by either buying more shares if the underlying starts to move up, or take other action.

Folly? Too dangerous?

Thank you.

 

[old coot]

You got to have some cash available to sell those 2 contracts naked. Suppose they discover the cure for old age, and the stock gaps to a thousand dollars a share. How you going to hand over the other 200 shares you've obligated yourself to?

 

[Arnie Guitar]

Yes...

I've got to remind myself not to post when I start drinking early....