That is the risk of selling covered call. Up is limited, down is unlimited. I guess you can set up with your broker to sell when it dive, here is the procedure: buy back call, sell the underlying stock right away. If I am wrong, someone pls correct me. I had same situation on GS two months ago.
【在 c***m 的大作中提到】 : That is the risk of selling covered call. Up is limited, down is unlimited. : I guess you can set up with your broker to sell when it dive, here is the : procedure: : buy back call, : sell the underlying stock right away. : If I am wrong, someone pls correct me. I had same situation on GS two months : ago.
G*m
12 楼
明天的事儿都不知道呢。。。。。。
c*m
13 楼
I heard they invented an new anti cancer drug, not sure if it is true or not . Cramer loves this one.
【在 j*****7 的大作中提到】 : 挺好的, Pipeline上东西一大堆。
G*m
14 楼
6个月,太远了。
c*m
15 楼
I guess the commission for buying back call and sell the underlying should equal to one trade. Am I right?
I don't think so. It's called dividend arbitrage. Arbitrageurs do these every minute. either call or stock would be adjusted. the probability to find those is small.
You misunderstood what Leader #5 said. He did not claim there is any risk-free gain in this kind of trade. What he said was that he's willing to assume the risk of this trade and in return get the said annualized return. Any downside risks? Of course. And, he rightfully acknowledged that. Then, what's the complaint here?
【在 m********0 的大作中提到】 : I don't think so. It's called dividend arbitrage. : Arbitrageurs do these every minute. : either call or stock would be adjusted. : the probability to find those is small.
w*e
24 楼
How come 9%? 2011Jan 15C is in money covered call., now PFE is 15.35, if option exercised, you get 0.65 profit if premium is $1 , adding dividend 0.36, all you can get is $1.01, around 6.5% gain, which is the max gain you get from in money covered call.
【在 w*********e 的大作中提到】 : How come 9%? : 2011Jan 15C is in money covered call., now PFE is 15.35, : if option exercised, you get 0.65 profit if premium is $1 , : adding dividend 0.36, all you can get is $1.01, : around 6.5% gain, which is the max gain you get : from in money covered call.
w*e
26 楼
I see. then you are right, you get gain around $1 from premium
sorry, you are right. I did not read the post carefully, I think he meant covered call writing. what I tried to say is it's needless to mention dividend. you will get dividend, but stock price will be adjusted accordingly, so does the option price. so basically, this is still a bullish outlook on the underlying. otherwise, I don't see in any way it's safe.
he
【在 g*****u 的大作中提到】 : You misunderstood what Leader #5 said. : He did not claim there is any risk-free gain in this kind of trade. What he : said was that he's willing to assume the risk of this trade and in return : get the said annualized return. Any downside risks? Of course. And, he : rightfully acknowledged that. : Then, what's the complaint here?