So a little background, I (41m) make a decent salary for where I live, but I can get pretty busy at work, not to mention I would be away from my computer/cell phone due to meetings, so it would be impossible for me to trade/look at stocks at particular times during the day. After years of frustration, I have finally try selling cover calls.
- I aim for volatile large cap stocks so the I can gain more premium with each option sold.
- For the month of March, I focused on TSLA.
- I don't sell naked calls.
- I only sell weekly calls.
- I roll it on Friday, normally 15 minutes before the market closes.
- I bought 100 of TSLA on 3/9 and let it be called out (sold) on 3/31/2023.
Here are the results:
- 03/09 ~ 03/31: bought 100 shares at $184.5, strike out at $207.5, profit +$2300
- On 3/09, sold 3/17 call, strike price $180: Sold for $920, buy back for $60, profit +$860
- On 3/17, sold 3/24 call, strike price $180: Sold for $580, buy back for $813. lost -$233
- On 3/24, sold 3/31 call, strike price $180: Sold for $1142, buy back for $2075, lost -$933
- Total profit: $1994
Now, if I didn't sell those covered calls (instead of just holding the stock), I would have made $2300 instead (of $1994). However, the very next week the stock price of TSLA went from around $207.5 to $185. So, if I would have just rolled that last week (3/31) I would have retained all my profit (sold maybe for around $2090, buy back around $500), versus holding the stock and have all the profit gone in a week. That is the attractive part about selling calls, is that you always collect a premium each week regardless the price of the stock.
So I do a few questions, maybe the community can help. Where can I learn more about selling calls? The articles I found online only covers the very basic concepts of it, and I would like to have a more in-depth perspective of this, for example; how to select the strike price, expiration date, when to roll, stock selects, etc. Thanks.
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