2006-12-15 07:44:37 · 6 answers · asked by whitiep 1 in Business & Finance ➔ Insurance
Options are risky for those not expert at securities trading and strategies. Covered calls means that , when you sell a call, you have the equivalent number of shares to deliver if you get "called away". When you sell a call, it gives the buyer the right to buy your shares at the price at which you sold the call (the strike price). So, if you have shares that you paid $25 for and you sell a call at a strike of $30 and the price goes to $50, the person who bought the call can "exercise the call" and buy your shares for $30. Your exposure is you opportunity loss. If the call expires unexercised then you've made the premium that the person who bought the call paid less commission.
2006-12-15 07:53:18 · answer #1 · answered by canela 5 · 0⤊ 0⤋
There only two types of people who make money in the options market. First and foremost is the trader they earn money coming and going. The second group are those who sell covered calls because they already own the stock and just have to be willing to sell at the call price if the stock goes up.
2006-12-15 09:59:53 · answer #2 · answered by waggy_33 6 · 0⤊ 0⤋
depends on what 'a covered call' means.
2006-12-15 11:56:50 · answer #3 · answered by Anonymous 7 · 0⤊ 0⤋
Not as much as uncovered calls.
2006-12-15 07:47:03 · answer #4 · answered by Cabana C 4 · 0⤊ 0⤋
YES! Just don't mess with options.
2006-12-15 07:47:36 · answer #5 · answered by lm 3 · 0⤊ 0⤋
it depends
2006-12-16 23:08:49 · answer #6 · answered by Anonymous · 0⤊ 0⤋