Sold a Covered Call
I sold my first ever option! 1 contract, covered call on SSO.
Jan’09 with strike $23. Got $4.10 for it, which means I net $212.05 after commission.
Questrade options commissions are $9.95 + $1 per contract.
If SSO is above $23 in January, my shares will be called out. If not – I keep them. I want them to get called out, but won’t worry either way.
That was partly my intention in buying SSO – to try options. Just 100 shares, not expensive, but somewhat liquid.
Right on. Making your first options trade makes you feel like you’ve graduated trading high school and moved on to trading college 🙂
Read Taleb’s Fooled by Randomness and his take on selling premium.
Good luck!
Trading is fun again, haaa! 🙂
Feels really good.
You have no idea how long it took me to understand covered calls. Someone was very generous with his time explained it to me, made 3 attempts.
The first time everything just went above my head because I’m (was) afraid of options, so the fear must’ve blocked the brain cells.
Taleb occupies an honorary spot on my forever-meaning-to-read list. This particular book – is it more interesting or practical?
No, understanding options is a new education entirely outside of stocks. Don’t beat yourself up.
Now work on understanding more complex options strategies like straddles, strangles, butterfly’s & condors.:-)
Great options books:
1) Sheldon Natenberg. Options Volatility & Pricing
2) Anthony Saliba. Option Strategies for Directionless markets.
Don’t expect a breezy read, but you will go right up the learning curve after you’ve read both.
Read either Black Swan or Fooled by Randomness by Taleb – great reads that will open your mind to how risk really exists Vs how we view it. I am also a fan of his style. He isn’t dry and he gets his point across in an easily digestible manner.
The option I sold is 25% higher now + I could’ve just sold the stock in the afternoon and pocketed the same amount, in one day.
That’s ok, that’s ok – it was a learning experience (*keep telling this to myself and it’s working* 🙂 )
All I’m getting for Christmas is books this year 🙂