re: Diving deeper on Standard Lithium?

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For people with thousands of shares you can sell lots of premium in the options market to juice your returns.

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Would you be so kind to give us a lesson, with some examples of this?

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For people with thousands of shares you can sell lots of premium in the options market to juice your returns.

Would you be so kind to give us a lesson, with some examples of this?

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He’s talking about selling Covered Calls. For every 100 shares you own, you can sell one call contract. A buyer would pay you a “premium” for the opportunity (but not the obligation) to buy your shares at a certain “strike” price.

For example, the options expiring November 19th are currently going for .40 each at the $15 strike. So you could sell one covered call (lot of 100 shares) and make an instant $40. If the share price is less than $15 each at end of day November 19th, you keep the $40 and your shares. If it’s over $15 at EOD 11/19, your shares are sold at $15 each, so you are paid $1500 for your shares and you keep the $40 premium too.

The risk is that the price jumps up to $17 a share or something, but you still only get $15 a share. The ideal scenario is that the stock closes less than $15 a share and you keep your shares and the premium (the option expires worthless). You can always buy back your covered call early if you want to keep your shares, or roll it out and up.

Now, if you have 1000 shares, you can sell 10 of those covered call contracts and make an instant $400. All of the above still applies. If you have 10,000 you can make an instant $4k today.

Options prices are constantly changing, as it’s based on the bid/ask spread like a stock. They are heavily influenced by “the Greeks” (delta, gamma, Vega and theta).

It’s one of those things where it’s easy to learn, difficult to master. So many levels and strategies.

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If it’s over $15 at EOD 11/19, your shares are sold at $15 each, so you are paid $1500 for your shares and you keep the $40 premium too.

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Wouldn't the share price need to be over $15.40 in this theoretical to be exercised, because it needs to account for the premium paid before it's in the money?

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Wouldn't the share price need to be over $15.40 in this theoretical to be exercised, because it needs to account for the premium paid before it's in the money?

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The option would still be exercised, but the buyer would take a loss in that instance.

The buyer would most likely sell that call before it expires in that example for some intrinsic value (delta and theta).

I've been very confused about options as well, but agree that your explanation was easily the best I've heard so far.

Let's make a run here at the end of the day.

TSLA is up damn near 100 bucks.

I'm afraid to sell options on this stock because I'm holding everything I can and don't want to sell any shares. I might buy a few options at some point should it look like we are going to take a big jump.

Fully funded lending lets me pick up more shares at the end of the month.

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What your thoughts on a blue chip like NEE or SO? Surely electric energy prices are going to continue to climb as more and more people switch over to EV?

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I invest in utility funds. Don't know much in depth info about either one as to whether they'll outperform or not. The vast majority of my investments are in funds. I buy very few individual stocks. I look for bargains with highest potential return when the market takes a shite, and stick to companies I know and have been following. Then a few speculative stocks here and there like SLI.

Thursday the 4th for Lanxess and sometime next week for SLI....I want to say Tuesday the 9th, but not sure exactly