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re: Dedicated Short / Put Thread
Posted on 4/16/21 at 11:23 am to RedStickBR
Posted on 4/16/21 at 11:23 am to RedStickBR
Sorry for the additional off-topic intrusion, but I feel like you fellas are the right people to ask. I tried to sell two covered calls for my AKBA position. Only 1 one of them filled (I assume that's why there's a -1 there), the other expired, and I just want to make sure I'm reading the numbers correctly and know my options.
I thought that when the option sold I'd get the $25 premium immediately. Was that not the case? Can I sell this covered call before expiration and make money if I want to?
Clearly I'm not super educated on this stuff, so using a clunker of a stock at a lower cost to dip my toe in.
I thought that when the option sold I'd get the $25 premium immediately. Was that not the case? Can I sell this covered call before expiration and make money if I want to?
Clearly I'm not super educated on this stuff, so using a clunker of a stock at a lower cost to dip my toe in.
This post was edited on 4/16/21 at 11:24 am
1
Posted on 4/16/21 at 11:45 am to Chucktown_Badger
It’s a negative 1 because you sold the option, so you’re short the option.
You can buy it back whenever you want, but you only get the full premium if you hold to expiry and the option is out of the money or if it becomes so out of the money before expiry that you can buy back at 0 before then.
You did get the 25 premium immediately, but you only keep the full premium if the option price subsequently goes to 0. Otherwise, you only collect the difference.
You can buy it back whenever you want, but you only get the full premium if you hold to expiry and the option is out of the money or if it becomes so out of the money before expiry that you can buy back at 0 before then.
You did get the 25 premium immediately, but you only keep the full premium if the option price subsequently goes to 0. Otherwise, you only collect the difference.
This post was edited on 4/16/21 at 1:01 pm
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