Trying to not have to sell to meet margin call. Are LONG covered calls an option?

[babaganoosh]

In 1 margin account, I've taken a buy and hold position in TQQQ. I've started selling covered calls with less than a week till expiration and been doing pretty good.

The broker changed the margin requirements from 75% to 100%. Just as well - I keep getting burned over the years with margin calls, sell low but over the long term, I'd have stayed in / not sold at the lows.

So now - do I sell to meet the margin call or.... I just thought of this...

Selling something like 150 calls exp 1/2024 gets a fair amount of $$. That should cover the margin call.

And at some point soon, I can buy back the calls by selling some TQQQ at a higher price. ANd the options won't have increased much. It's more time value in the price?

Thoughts?

And while I'm posting - any advice on selling covered calls in general? You can't have too low a strike otherwise they'll get called. But too high and you aren't making anything worth the trouble. what do you aim for as the strike price vs. the current price?

 

[murray t turtle]

In 1 margin account, I've taken a buy and hold position in TQQQ. I've started selling covered calls with less than a week till expiration and been doing pretty good.

The broker changed the margin requirements from 75% to 100%. Just as well - I keep getting burned over the years with margin calls, sell low ....
Thoughts?

%%
Depends;
on how much you want to lose lose. This week tends to finish down.
Margin call or[ auto repo\had one of those as young man=too much borrowing]
KEEP on getting margin calls, blowing up accounts??= Change
Its already gone down more than i thought\today.....................................................\but good thing it gaped down a bunch .
BUY in hold in SEPT or MAY maybe the worst way do it ??

 

[newwurldmn]

Reduce your size. You dont want to be in this type of position where you are managing your margin req this way.

 

[xandman]

Instead of using the beta leverage of TQQQ. Use the margin leverage of NQ.

You can have the same exposure without the cost friction of that horrible ETF product.

Make sure you size prudently. You sound like a blowup waiting to happen.

 

[murray t turtle]

TQQQ........
Make sure you size prudently. You sound like a blowup waiting to happen.

%%
IF i had to pick one or 3 months to get smaller/sell =SEPT or MAY\MAR.
BUT really can't predict it.
I did get filled on SAT open order TQQQ\ today\but only one share+ @ noon not sure if i want one share tqqq/LOL,

 

[KCalhoun]

What's a margin call?

I vaguely remember getting one back in 2003

 

[murray t turtle]

What's a margin call?

I vaguely remember getting one back in 2003

%%
Its like a repo;
the bank\broker gets mad + sells it quick. WHY do all forced sell$ get such a lousy price?? NOT a prediction + now they disclose ''not FDIC insured''.............................................................
Cant really scale out in an auto loan gone bad;
but i did hear on the news MD was double counting axles on toll road .Its like a 2x ETF gone state gov crazy double charge..........

 

[E-MiniToGo]

I've had a great deal of experience trading TQQQ and always have open positions for the last five years. Here are my thoughts on trading it.

1) I only go long on TQQQ as a trade paired with an in the money covered call, with the goal of taking the Call buyers money if the stock dips or getting the stock called away. My strike price is often the lowest price it has traded over the last two weeks. Recently it was trading in the $150's and I was selling calls in the $130's. Worked out great today, since the stock took a huge hit.
2) My time line is one week for the first entry, due to the wild swings in the stock.
3) Profit target for the pair is approx. 35 to 40 % annualized. It's not hard to get on this 3X stock.
4) If the trade breaks my ITM strike price or hits major lower support, I'll close the call for a profit and look out to the next week for another strike that maintains my original profit target goals, considering the first calls realized profit.
5) Although TQQQ has been the single best performer I've ever traded (always make my target), I only feel comfortable investing about 35% of my total portfolio in the stock.
6) Only a handful of times has the stock moved to a point I was stuck trying to find option premium out past 30 days and I decided to buy more shares to get my average price down, rather than selling LEAPS on the stock.

Although I think selling a long term option on TQQQ wouldn't be a losing trade if you had a larger account, it would likely be a poor performing trade overall and watching your stock tank and the call option hardly move at all is depressing.

Take away... TQQQ is not a stock to trade if you're using any sort of margin, and you need to feel comfortable when it takes a 10% swing.... word of advice --- NEVER short the stock - since you'll loss all your money.

Best

 

[Overnight]

...

Take away... TQQQ is not a stock to trade if you're using any sort of margin, and you need to feel comfortable when it takes a 10% swing.... word of advice --- NEVER short the stock - since you'll loss all your money.

Best

So never ever short TQQQ, because you will steal all the bull money. Good to know. Thanks for the helpful handy tip there? Have any advice on AT&T? Asking for a friend.