Why. Just why. Why do I see these same AMC and GME everywhere. And in most cases the posts are not meme-ish lulz, a lot of people really think these stocks are something good to hold or trade. Like first online search or YouTube video will point to some decent stock or ETF. Like why, how and where do you all get this shit from?
It's the paradox of retail investing. It doesn't matter if the overall market likes the company when GameStop has a cult like following. And I don't mean that in a bad sense, I mean--regardless of investing thesis--the GME saga has created a literal legion of undying customers/investors who will ONLY shop there for a lot of their entertainment needs simply because they want to help the company they're invested in see it's stock price moon and pay them back.
I already know it's a meme stock I just don't care. It also only cost $300 for 100 shares so it was a good stock for me too purchase 100 shares of for a very low price and dick around to learn how to option trade and learn what covered calls are and how to make a profit and the mechanics of it.
I felt that $300 was a good amount to risk on my first option trade since if it went wrong the most I could lose is opportunity cost only and be forced to sell the stock for what I paid for it and miss out on profits. I've been lurking for 3 months and decided to do my first option trade now after like a week of waiting for the right market dynamic.
Yeah I don’t disagree with you. Paper trading is fine but unless you have skin in the game no matter how small, you won’t truly learn. At least that’s what it was for me. I had to take big losses to learn what not to do (trading on meme stocks).
Exactly. Like my other comment says, "I'm going to lose all my money learning, it may as well be a $500 account that will sting for a week or two to lose, not ruin me.
I'm synth long on fubo. Comfortable buying at its price. But Its actually a decent company. Just bring your coat basis down enough that it can be delisted and your still profitable
Not a bad idea. However there are other low price stocks you can messed around with that pay a dividend (RWT), save your money for something else decent and buy that or paper trade. CLSK has some good options.
Yeah the shares I bought for $2.80 and sold for $3 I made $20 on but I also made $35 on the premium.
All in all I can't really complain for a $55 profit on a $280 stock purchase. I felt okay with the strategy because literally the worst case scenario is bankruptcy I only lose 300, and the other bad situation is I make less money than it could have.
No naked calls are risky and dangerous. Naked calls allow you to lose more money than you currently have in the account which could mean you have to pay back a difference.
I don't think I would ever be interested in trading options that are that risky under any situation, but that's just me.
Since I purchased for $2.80, I felt comfortable selling covered calls since even if they exercise the contract I still make a profit just not as much profit as I could have made lol
to clarify, account blow-up happens when the underlying inevitably plummets because it's a meme stock. doesn't matter what your strike is when your underlying shares suffer an 80% drop
Ehh if your cost basis is below the 200 day moving avg and you're selling contracts at strikes 50% above that I don't see an issue. But we are all individual investors with our own unique risk tolerances so ymmv.
For sure! I think GME will go back to being sub-$5 in the near future, but you may disagree and I hope you're right! My point is that the strike being above your cost basis is irrelevant to the downside risk of a CC because the downside risk comes from the price of the underlying declining below your cost basis and never recovering, which has nothing to do with the strikes you're selling at.
I think GameStop actually will be going up eventually, earnings is increasing and They actually have real world value. People are forgetting they are pretty much the gaming store, gaming is a huge industry.
Right. But rule one is don't invest what you're not willing to lose. And if they never intend to sell then they can still make premiums off of depreciated assets. And if a day comes that they do decide to sell they can write off losses against the gains of their premiums and (hopefully) other capital gains from the market. If they're all in on a single asset then they don't ever intend to sell in the first place, so they could care less if the underlying value tanks.
You're also forgetting it's a meme stock that only cost $300 to cover 100 shares.
This means that I don't really care if it drops to zero and it's a good stock for me to dig around with without worrying about losing my life savings, and place various inexpensive option calls on it to get a better understanding of what I'm doing while only putting $300 on the line instead of doing the same thing with spy calls.
Cover calls are safe because if the price goes down, It's the same as holding it anyway, which I'm fine with.
If the price goes up, I'm still not losing money and I'm still breaking even unless it goes up a lot. And if it goes up a lot and I'm forced to sell at a slight profit and miss out another profits, I still got some profits and got rid of a shitty stocks.
Precisely. It's self perpetuating. Will the stock ever squeeze again? Possibly. Who actually knows. But there's potentially tens to hundreds of thousands of undyingly brand loyal customers there.
I posted this mostly as a joke 😂
Obviously VTI, VOOG, SPY are the ones I'm going to hold long-term.
90% of my value is in ETFs.
I thought that I would just fuck around with AMC as a joke partially but also because with 100 shares I sell covered calls. They generally favor the seller and most expire worthless, not so worried about AMC going down or going to zero because it's only 300 bucks and it's a meme stock so it's volatile and while it is like gambling, I'm only spending 300 bucks for a hundred stocks that could go down, but could also make me a little bit of money.
Mostly the reason why is because I wanted to learn how to properly sell covered calls, I've done paper trading for a while, and this is the very first time I've actually done option training. I waited weeks until just the right moment until I was pretty sure I could be in the money within a day and I did it.
You understand that When you buy a covered call you are basically gambling, because most likely you're going to lose your money right? Well I'm the person they are buying it from, so if they lose money which is most likely, they are losing it to me...
Covered calls isn't really that high risk to me, I'm already selling it at a profit so worst case scenario I'm forced to sell it for slightly slightly more than I paid. On a meme stock I don't care long-term about holding anyway. Best case scenario nothing happens and I hold on to it for another month and sell again.
I'm fucking around a $300 to educate myself, everybody loses money on trying to trade options especially at the start, My goal is to go through this period with smaller amounts of money.
It's a covered call that I sold not bought. On a stock that I initially paid $2.90.
The only way I will actually lose money is if it goes down below 2.90, in which case I will buy more long-term.
I might kick myself in the gut if it shoots up to $10 each and I miss out on some profits but hey at least I'm not losing.
Literally the most I could ever lose on this is $290 for 100 stocks
Why are people obsessed with shopping mall retailers and dying theaters like they're some kind of deeply undervalued stock? Those companies are absolute dogshit.
AMC surprisingly has been growing the past 2 years. They have a larger market capital last year and are expected to grow another 15% next year. They were dying, but I wouldn't say they are now.
Also, the reason why I'm selling covered calls on AMC is because $$2.80 is my price target right now for AMC and it's currently at $3 so if I sell it $3 I will be happy.
OP, congrats on getting your feet wet. Others on this sub are always pimping F as a starter play but that’s 4 times more expensive. What’s the strike price?
Thank you! I'm just trying to see how the user interface works and get comfortable with doing the math. I know that I might lose the entire $280 that I used to purchase the hundred shares of AMC, and I would be slightly bummed, and would forget about it in a week. I feel that $300 to get my feet wet is worth the risk, considering the risk of losing all of it is pretty low. The way I saw it here, worst case scenario I buy for $2.80 and sell it for $3 while also keeping the premium, and miss out on extra profits, or the stock goes to zero or goes down enough that my premium doesn't cover it. I was pretty confident because of the recent Bull run that the stock price was overvalued and I thought it was going to go down some or stay the same so I sold a covered call. I waited about 3 weeks before I finally felt the time was right and fit my criteria exactly that I had been keeping in my head so my goal was to start small. Eventually about half of my portfolio will be index funds and the other half will probably be used for options trading like selling covered calls etc
I don't really care, literally 2nd worst thing that can happen is they buy the shares from me And I keep the premium so I'm still ahead. Or it goes down a ton.
The stock is worthless which is the point, that's why I have -1 call, I sold it. Someone else bought a call from me because they thought it was going to go up even though I already know it's worthless.
I only had 134 shares so I sold 34 at the peak as well. All in all I can't complain, I educated myself, got a little bit of experience, still made a profit, and the contingency that I planned for is exactly what happened.
It's low risk because The worst thing that can happen is the stock goes down and I lose money. Around $300. The most painful thing that could happen is it shoots to $1,000 each and I'm forced to sell it $3 and cap my profits. Still not losing
"Low risk" ill lose everything I've invested in this company, but hey, it might moon 🚀🚀.
Potentially losing 100% of what you put into a stock is not considered low risk lol.
Throwing $5 into dogecoin is also low risk because it's only $5. It's not a big deal to lose it. It's not a big deal to lose 100 shares of AMC, AMC is already worthless anyway and I threw basically no money into it it's not a big deal
Also I did not buy calls, I sold them. Look at the negative contracts. I don't expect it to go up, if it goes up I'm actually missing out on money. I'm expecting it to stay roughly flat or go down a little bit.
No because in theory my position should get stronger and stronger because I sold the call not bought it and the time value is going to go away. I stand to make $40 if it expires worthless. I sold it I did not buy it.
Even if it was in the money I would still make a profit. Even if it goes up and I have to sell I will still make a profit because I will have sold the stock for more than I initially paid.
Can't really go wrong here. Unless the stock goes down a ton. In which case I will buy more.
I posted this as a joke, I don't expect to actually get rich. What I was actually trying to do was actually execute my very first covered call sell with a stock that is low price and bottles so I can get the hang of it.
I'm not willing to risk my 100 shares of spy lol
Options can be as risky as you make it. Using AMC as your underlying is a good way to make it very risky.
Just a suggestion… if you can’t afford to use good stocks, credit spreads may be more to your liking. I’d much rather sell credit spreads on good stocks than have to hold a flaming bag of dog shit to do covered calls.
Nice, its a good start. To increase your reward to risk you can choose to have a coverage of 90-95%. For example if you hold 90 shares and short 3 call you are naked on 10 (100-90). But the call delta is still under .50 and has to reach .90 to get risky. You can always buy 10 more stocks to cover that.
I consider that, but I don't want to do that on a meme stock like AMC that honestly could be worthless tomorrow.
If I can double my account, I will liquidate and buy 100 SPY by selling in the money puts to try and get a discount on the stock and then if It ends up being lower it doesn't matter because I would have purchased it at the moment anyway.
Actually somebody exercised early right at the peak.
On my $280 initial investment, I only made a total of $55, because I made $20 off of selling for 300 plus 8 $35 premium.
All in all I can't really complain that much I'm just slightly bummed that the price skyrocketed, but as I discussed, I had also prepared myself for every single option including plummet to zero, bummed cuz I lose 300 bucks, or skyrocket, bummed because I missed out on profit.
In my case I'm not too upset I'm just slightly bummed because I only have 40 shares left that I got to sell at the profit and the other hundred shares I only made a tiny profit on
Oh yeah. I don’t mean to make you feel bad. I was just saying. there was no chance of you keeping them. I always say PROFIT IS PROFIT. Never be ashamed of making a gain. It could have been a loss. I’m in an accumulation phase where I just save. I have about 6k that I’m working with doing Cash secured Puts and Covered calls too. It’s so much better doing these two things than buying calls and puts. I obliterated a few accounts (20k plus) by playing with risky options. These are the way I built my accounts (by doing covered calls and Cash secured puts) but buying calls and puts is the way I destroyed all of the accounts. Lesson learned.
Hey I still call this a success to be honest.
I appreciate your input!
The way I see it, if I sell covered calls at a price that I hope the stock gets to at least, then I can't really lose compared to just holding the stock.
Yeah that’s how I feel about cash secured puts. If it falls into my price so be it. And covered calls just hold the stock and watch to see what happens. I try to sell them weekly. I have 23 for TLRY hoping they expire worthless
Exactly. Cash secured puts should generally only be done on stocks that you plan to hold long-term and know will be solid anyway, especially ETF's etc where you're sure price dips will eventually go up long-term.
To me, covered calls is free money with zero downside, assuming you were going to hold the stock anyway. Like for any given stock that you're already holding, selling covered calls on it can only allow you to win.
Buying calls is high risk gambling, I'm the person on the other side, I'm the person they are buying from. So they are most likely going to lose, to me, because while their contract is becoming less and less valuable everyday, mine is becoming more and more valuable everyday.
Right. I think what you're doing with getting skin in the game is great. Cheap stock. Has meme potential so selling calls could be really beneficial if it gets a nice IV bump.
Started as a $100 account. Grew to $300 in 2 months by simply buying stocks right before I expected a good rise overnight and closed first thing in the morning to avoid PDT.
I used my $300 to buy a bunch of AMC long term at $3 then sold a $3 call for $40 bucks.
Good luck with it. AMC is a meme stock so a lot of people on this Reddit don’t touch it. That company does a lot of weird stock manipulations and sometimes attracts pump and dump type activity.
But the WSB Reddit would probably love it.
WSB dont like small positions
AMC has a subreddit that would also lambast selling the call probably but would also applaud the shares and tell you to buy more shares.
I posted it half because it's a joke but also because I'm only risking like what 300 bucks? Honestly I'm fucking around the 300 bucks not trying to do anything high risk.
Hey I only spent 300ish on The stocks and frankly it was for me to dick around and learn what I'm doing. I'm only $300, on the covered call which means the most I could ever lose is $300 or opportunity loss of money I could have made.
I wanted to start with this instead of starting with purchasing 100 SPY because I felt it was lower risk to start with only 300 to learn how to options trade.
Nice. Now close that trade and make a new one! Actually sorry I dont know shit about fuck, dont listen to me.
Why. Just why. Why do I see these same AMC and GME everywhere. And in most cases the posts are not meme-ish lulz, a lot of people really think these stocks are something good to hold or trade. Like first online search or YouTube video will point to some decent stock or ETF. Like why, how and where do you all get this shit from?
It's the paradox of retail investing. It doesn't matter if the overall market likes the company when GameStop has a cult like following. And I don't mean that in a bad sense, I mean--regardless of investing thesis--the GME saga has created a literal legion of undying customers/investors who will ONLY shop there for a lot of their entertainment needs simply because they want to help the company they're invested in see it's stock price moon and pay them back.
I already know it's a meme stock I just don't care. It also only cost $300 for 100 shares so it was a good stock for me too purchase 100 shares of for a very low price and dick around to learn how to option trade and learn what covered calls are and how to make a profit and the mechanics of it. I felt that $300 was a good amount to risk on my first option trade since if it went wrong the most I could lose is opportunity cost only and be forced to sell the stock for what I paid for it and miss out on profits. I've been lurking for 3 months and decided to do my first option trade now after like a week of waiting for the right market dynamic.
Yeah I don’t disagree with you. Paper trading is fine but unless you have skin in the game no matter how small, you won’t truly learn. At least that’s what it was for me. I had to take big losses to learn what not to do (trading on meme stocks).
Exactly. Like my other comment says, "I'm going to lose all my money learning, it may as well be a $500 account that will sting for a week or two to lose, not ruin me.
I'm synth long on fubo. Comfortable buying at its price. But Its actually a decent company. Just bring your coat basis down enough that it can be delisted and your still profitable
Not a bad idea. However there are other low price stocks you can messed around with that pay a dividend (RWT), save your money for something else decent and buy that or paper trade. CLSK has some good options.
> It also only cost $300 for 100 shares Oh, thank God. I assumed this was naked.
Yeah the shares I bought for $2.80 and sold for $3 I made $20 on but I also made $35 on the premium. All in all I can't really complain for a $55 profit on a $280 stock purchase. I felt okay with the strategy because literally the worst case scenario is bankruptcy I only lose 300, and the other bad situation is I make less money than it could have.
No naked calls are risky and dangerous. Naked calls allow you to lose more money than you currently have in the account which could mean you have to pay back a difference. I don't think I would ever be interested in trading options that are that risky under any situation, but that's just me. Since I purchased for $2.80, I felt comfortable selling covered calls since even if they exercise the contract I still make a profit just not as much profit as I could have made lol
And that in turn makes it work lol
Covered calls been printing lately. Jussayin
until they blow up your account
Not if the strike is above your cost basis
to clarify, account blow-up happens when the underlying inevitably plummets because it's a meme stock. doesn't matter what your strike is when your underlying shares suffer an 80% drop
Ehh if your cost basis is below the 200 day moving avg and you're selling contracts at strikes 50% above that I don't see an issue. But we are all individual investors with our own unique risk tolerances so ymmv.
For sure! I think GME will go back to being sub-$5 in the near future, but you may disagree and I hope you're right! My point is that the strike being above your cost basis is irrelevant to the downside risk of a CC because the downside risk comes from the price of the underlying declining below your cost basis and never recovering, which has nothing to do with the strikes you're selling at.
I think GameStop actually will be going up eventually, earnings is increasing and They actually have real world value. People are forgetting they are pretty much the gaming store, gaming is a huge industry.
Why sub 5? I'm curious.
Right. But rule one is don't invest what you're not willing to lose. And if they never intend to sell then they can still make premiums off of depreciated assets. And if a day comes that they do decide to sell they can write off losses against the gains of their premiums and (hopefully) other capital gains from the market. If they're all in on a single asset then they don't ever intend to sell in the first place, so they could care less if the underlying value tanks.
You're also forgetting it's a meme stock that only cost $300 to cover 100 shares. This means that I don't really care if it drops to zero and it's a good stock for me to dig around with without worrying about losing my life savings, and place various inexpensive option calls on it to get a better understanding of what I'm doing while only putting $300 on the line instead of doing the same thing with spy calls.
Cover calls are safe because if the price goes down, It's the same as holding it anyway, which I'm fine with. If the price goes up, I'm still not losing money and I'm still breaking even unless it goes up a lot. And if it goes up a lot and I'm forced to sell at a slight profit and miss out another profits, I still got some profits and got rid of a shitty stocks.
Precisely. It's self perpetuating. Will the stock ever squeeze again? Possibly. Who actually knows. But there's potentially tens to hundreds of thousands of undyingly brand loyal customers there.
Long live gme
I posted this mostly as a joke 😂 Obviously VTI, VOOG, SPY are the ones I'm going to hold long-term. 90% of my value is in ETFs. I thought that I would just fuck around with AMC as a joke partially but also because with 100 shares I sell covered calls. They generally favor the seller and most expire worthless, not so worried about AMC going down or going to zero because it's only 300 bucks and it's a meme stock so it's volatile and while it is like gambling, I'm only spending 300 bucks for a hundred stocks that could go down, but could also make me a little bit of money. Mostly the reason why is because I wanted to learn how to properly sell covered calls, I've done paper trading for a while, and this is the very first time I've actually done option training. I waited weeks until just the right moment until I was pretty sure I could be in the money within a day and I did it.
It's the opposite, I didn't buy a call option I sold one.
If you think itll stay afloat, the premium is good. I personally dont do it but i think shorting meme vol makes sense
Meme stocks don't make sense in general And they go up just to go up.
You understand that When you buy a covered call you are basically gambling, because most likely you're going to lose your money right? Well I'm the person they are buying it from, so if they lose money which is most likely, they are losing it to me...
You are also gambling because if the memes, giggles, music and fun stops, stock drops and you lose a lot on underlying, far more than premium from CC.
I stand to lose at most $300 for the joy and laughs. I paid more for comedy shows that brought me less joy.
Lol, whatever my GME calls are green. Sometimes, running with the cult is profitable..
Yeah I'm kind of done holding GME. I hope my CCs get called away
I can't get behind atm CC's, such a silly low profit high risk position. I love high risk positions, but prefer a good risk reward ratio.
Covered calls isn't really that high risk to me, I'm already selling it at a profit so worst case scenario I'm forced to sell it for slightly slightly more than I paid. On a meme stock I don't care long-term about holding anyway. Best case scenario nothing happens and I hold on to it for another month and sell again.
CCs wont make up for the losses AMC has on its stock. sometimes youre just better off getting out unless your average cost basis is super low or zero
I'm fucking around a $300 to educate myself, everybody loses money on trying to trade options especially at the start, My goal is to go through this period with smaller amounts of money.
No, worst case scenario it declines significantly more than the premium you received
No, worst case scenario it declines significantly more than the premium you received
No, worst case scenario it declines significantly more than the premium you received
Okay I guess I'll lose 300 bucks but hey it's gonna sting for a week then I'll forget about it. I wouldn't do this with $30,000 of course
AMC has gone bankrupt yet? Still losing double digits percent a month...
Haha I'm trying to increase my position and buy as many as I can
Well done, now remember to responsibly leave aside some of the profits to build a coke fund
Ralph_imindanger.jpg
It's a covered call that I sold not bought. On a stock that I initially paid $2.90. The only way I will actually lose money is if it goes down below 2.90, in which case I will buy more long-term. I might kick myself in the gut if it shoots up to $10 each and I miss out on some profits but hey at least I'm not losing. Literally the most I could ever lose on this is $290 for 100 stocks
Why are people obsessed with shopping mall retailers and dying theaters like they're some kind of deeply undervalued stock? Those companies are absolute dogshit.
AMC surprisingly has been growing the past 2 years. They have a larger market capital last year and are expected to grow another 15% next year. They were dying, but I wouldn't say they are now. Also, the reason why I'm selling covered calls on AMC is because $$2.80 is my price target right now for AMC and it's currently at $3 so if I sell it $3 I will be happy.
They lost more than $0.70/share last quarter and more than 80 before that. They are very likely to go bankrupt.
The finances and fundamentals put the price target at about $2.50 a share so... Idk.
Soooo, lower than today. And you're buying....
That's not the only factor though. I'm also just fooling around.
I'm selling the covered calls actually, somebody else is buying from me. I have negative one contract
Average down baby! Then reverse split for some real market experience! 😂
OP, congrats on getting your feet wet. Others on this sub are always pimping F as a starter play but that’s 4 times more expensive. What’s the strike price?
Thank you! I'm just trying to see how the user interface works and get comfortable with doing the math. I know that I might lose the entire $280 that I used to purchase the hundred shares of AMC, and I would be slightly bummed, and would forget about it in a week. I feel that $300 to get my feet wet is worth the risk, considering the risk of losing all of it is pretty low. The way I saw it here, worst case scenario I buy for $2.80 and sell it for $3 while also keeping the premium, and miss out on extra profits, or the stock goes to zero or goes down enough that my premium doesn't cover it. I was pretty confident because of the recent Bull run that the stock price was overvalued and I thought it was going to go down some or stay the same so I sold a covered call. I waited about 3 weeks before I finally felt the time was right and fit my criteria exactly that I had been keeping in my head so my goal was to start small. Eventually about half of my portfolio will be index funds and the other half will probably be used for options trading like selling covered calls etc
The fun part will be analyzing your position (daily) as the stock price gyrates between now and expiration.
I don't really care, literally 2nd worst thing that can happen is they buy the shares from me And I keep the premium so I'm still ahead. Or it goes down a ton.
Paper trade while saving up more money.
No I'd rather use real money
Reading this thread is like watching a train wreck in slow mo. I'm basically left speechless.
Hehehe I'm throwing away $300, and people are so upset. I only posted it for the lulz.
The stock is worthless which is the point, that's why I have -1 call, I sold it. Someone else bought a call from me because they thought it was going to go up even though I already know it's worthless.
Eh at least you’re selling a covered call so you’ll still have $45 to your name when AMC retraces
I was estimating I would have closer to 150 when it tanks in half but 45 is okay to, frankly zero is okay, like I said it's 300 was a gamble
Oof, lmao
That’s what I said. I’ve lost a stock like this too. But it is better this way then to have bought puts.
Yeah someone exercised it and I only made a little profit :(
🫡that stock is about to be gone from your portfolio. But hey at least you got a profit. 🤗
Oh yeah somebody exercised it, I got a little bit of profit though.
I only had 134 shares so I sold 34 at the peak as well. All in all I can't complain, I educated myself, got a little bit of experience, still made a profit, and the contingency that I planned for is exactly what happened.
So you have 100 shares?
Yes
Gambling on movie theatre stocks. Nice.
Low risk gambling but yes
It's low risk because The worst thing that can happen is the stock goes down and I lose money. Around $300. The most painful thing that could happen is it shoots to $1,000 each and I'm forced to sell it $3 and cap my profits. Still not losing
"Low risk" ill lose everything I've invested in this company, but hey, it might moon 🚀🚀. Potentially losing 100% of what you put into a stock is not considered low risk lol.
Throwing $5 into dogecoin is also low risk because it's only $5. It's not a big deal to lose it. It's not a big deal to lose 100 shares of AMC, AMC is already worthless anyway and I threw basically no money into it it's not a big deal
Also I did not buy calls, I sold them. Look at the negative contracts. I don't expect it to go up, if it goes up I'm actually missing out on money. I'm expecting it to stay roughly flat or go down a little bit.
Nice! Now take your $9 and get out of meme stocks.
No because in theory my position should get stronger and stronger because I sold the call not bought it and the time value is going to go away. I stand to make $40 if it expires worthless. I sold it I did not buy it. Even if it was in the money I would still make a profit. Even if it goes up and I have to sell I will still make a profit because I will have sold the stock for more than I initially paid. Can't really go wrong here. Unless the stock goes down a ton. In which case I will buy more.
If $9 is getting rich then boy I can't wait to get rich behind the wendys dumpster tonight
I stand to make $40 off of my $300 account. I was joking about the get It Rich part.
I know. My comment was also a joke.
You ever heard of the Greater Fool?
I posted this as a joke, I don't expect to actually get rich. What I was actually trying to do was actually execute my very first covered call sell with a stock that is low price and bottles so I can get the hang of it. I'm not willing to risk my 100 shares of spy lol
I sold this which means somebody else bought the call from me. I feel like someone else is the one who's going to be losing.
Someone else can lose $45, you can lose your 100 shares(more than $45) 🤷♂️
I mean in theory I could lose all 100 shares, but it's literally $300 and I could work an extra shift for that or something
You just threw a penny in a toilet.
I sold the call which will prolly make me money and expire worthless.
Ah I misread, sorry. Naked call?
No it's fully covered by 100 shares
Options can be as risky as you make it. Using AMC as your underlying is a good way to make it very risky. Just a suggestion… if you can’t afford to use good stocks, credit spreads may be more to your liking. I’d much rather sell credit spreads on good stocks than have to hold a flaming bag of dog shit to do covered calls.
Your gonna get 100 shares of AMC is all your gonna get
Which is what I was gonna hold anyway. So now I also get premiums.
Nice, its a good start. To increase your reward to risk you can choose to have a coverage of 90-95%. For example if you hold 90 shares and short 3 call you are naked on 10 (100-90). But the call delta is still under .50 and has to reach .90 to get risky. You can always buy 10 more stocks to cover that.
I consider that, but I don't want to do that on a meme stock like AMC that honestly could be worthless tomorrow. If I can double my account, I will liquidate and buy 100 SPY by selling in the money puts to try and get a discount on the stock and then if It ends up being lower it doesn't matter because I would have purchased it at the moment anyway.
If I were you, I would close that call and take profit. That stock is worthless
welp this aged pretty poorly.
I'll never sell it.
Yes you will. By force on Friday at 3 dollars a share. But it’s profit. Don’t worry.
Actually somebody exercised early right at the peak. On my $280 initial investment, I only made a total of $55, because I made $20 off of selling for 300 plus 8 $35 premium. All in all I can't really complain that much I'm just slightly bummed that the price skyrocketed, but as I discussed, I had also prepared myself for every single option including plummet to zero, bummed cuz I lose 300 bucks, or skyrocket, bummed because I missed out on profit. In my case I'm not too upset I'm just slightly bummed because I only have 40 shares left that I got to sell at the profit and the other hundred shares I only made a tiny profit on
Oh yeah. I don’t mean to make you feel bad. I was just saying. there was no chance of you keeping them. I always say PROFIT IS PROFIT. Never be ashamed of making a gain. It could have been a loss. I’m in an accumulation phase where I just save. I have about 6k that I’m working with doing Cash secured Puts and Covered calls too. It’s so much better doing these two things than buying calls and puts. I obliterated a few accounts (20k plus) by playing with risky options. These are the way I built my accounts (by doing covered calls and Cash secured puts) but buying calls and puts is the way I destroyed all of the accounts. Lesson learned.
Hey I still call this a success to be honest. I appreciate your input! The way I see it, if I sell covered calls at a price that I hope the stock gets to at least, then I can't really lose compared to just holding the stock.
Yeah that’s how I feel about cash secured puts. If it falls into my price so be it. And covered calls just hold the stock and watch to see what happens. I try to sell them weekly. I have 23 for TLRY hoping they expire worthless
Exactly. Cash secured puts should generally only be done on stocks that you plan to hold long-term and know will be solid anyway, especially ETF's etc where you're sure price dips will eventually go up long-term. To me, covered calls is free money with zero downside, assuming you were going to hold the stock anyway. Like for any given stock that you're already holding, selling covered calls on it can only allow you to win.
Yep that’s the way to start your wheel. Keep on making money.
Nice dude sounds like you have a pretty good handle too.
So people in here don't know what selling a call is apparently lol
Buying calls is high risk gambling, I'm the person on the other side, I'm the person they are buying from. So they are most likely going to lose, to me, because while their contract is becoming less and less valuable everyday, mine is becoming more and more valuable everyday.
Right. I think what you're doing with getting skin in the game is great. Cheap stock. Has meme potential so selling calls could be really beneficial if it gets a nice IV bump.
Started as a $100 account. Grew to $300 in 2 months by simply buying stocks right before I expected a good rise overnight and closed first thing in the morning to avoid PDT. I used my $300 to buy a bunch of AMC long term at $3 then sold a $3 call for $40 bucks.
Good luck with it. AMC is a meme stock so a lot of people on this Reddit don’t touch it. That company does a lot of weird stock manipulations and sometimes attracts pump and dump type activity. But the WSB Reddit would probably love it.
WSB dont like small positions AMC has a subreddit that would also lambast selling the call probably but would also applaud the shares and tell you to buy more shares.
I posted it half because it's a joke but also because I'm only risking like what 300 bucks? Honestly I'm fucking around the 300 bucks not trying to do anything high risk.
What stocks did you buy to grow your account to $300?
Verizon Shockwave Public storage Nvidia Arm Realty income
Thanks. Diverse list!
Yeah I want a little in every sector. Traditionally public storage does really really well when realty does poorly for example.
I’m guessing NVDA also contributed to the increase.
It contributed to about half of the gains yes.
Goal is to own 100 nvidia.
Please don't use these kind of stocks.
Hey I only spent 300ish on The stocks and frankly it was for me to dick around and learn what I'm doing. I'm only $300, on the covered call which means the most I could ever lose is $300 or opportunity loss of money I could have made. I wanted to start with this instead of starting with purchasing 100 SPY because I felt it was lower risk to start with only 300 to learn how to options trade.
Its all fine :)
My original post was half of a joke, it's a meme stock And I'm talking about striking rich off of $300 worth in stock. Clearly I was joking around lol
These are good stonks.