I want to dip my toes into options, so I figured that relatively solid company with a low price (~$11) would allow me to start a position around $1,100. Just sold a call at $11/share for about $12.50. Other than the stock collapsing could anything else go wrong?
Is selling covered calls on Ford a bad idea?
byu/RealCaramelli inoptions
Posted by RealCaramelli
4 Comments
Ford isn’t bad to start with but it’s pretty low IV so premiums will be low. If it falls to like $9 you’re gonna have to roll it like a year or double down. People here generally wheel options and start by selling puts then if they get assigned they sell calls
I’ve been wheeling it for the last 8 months or so with great success
I somehow own over 2k shares, and I’ve been selling the 12/13 credit spread in the hopes of getting called away from this turd. The 13 calls are cheap enough so I’m protected against a moon situation.
>start a position around $1,100. Just sold a call at $11/share for about $12.50.
to clarify, you say that you are starting a position. do you own the 100 shares? Bc with your phrasing, it sounds like you are selling a naked call. This would be a huge difference to selling a covered put, to ‘start’ your position
*edit: if you sold an $11 strike call, and if ford goes to $13, you will have to pay $1300 to cover your sold call if you do not have the 100 shares. If you did a covered call, you would just sell your 100 shares for $11 each at expiration and keep a $12.50 premium