@Optionspuppy：I think market is Low enough can start to sell cash covered put options for big tech like $Amazon.com(AMZN)$$Alphabet(GOOG)$$Meta Platforms, Inc.(META)$$Alibaba(BABA)$ I already started with Google Will start to sell $80put expiry leap at 24 months Most likely they will not ask me to excerise so I will place my money in tbills spore or tiger valut first And earn 4% yearly while earning also sell put Premium Of 5% yearly . Before expiry date . So works out to be 9% in total Can I see an example? Let’s say you buy or already own 100 shares of the fictional MEOW company at a price of $110, and you expect the stock will stay relatively flat or increase moderately in the near future. You could consider selling a call option for MEOW at a strike price of $125, for which you’d receive a $1 premium per share ($100 total). Maximum Gain or Loss Your maximum potential gain is limited to the difference between the strike price and the stock price, plus the premium you received. You can realize this gain if the call is assigned and you sell the stock, which typically happens when the stock price is higher than the strike price at expiration. Meanwhile, in theory, you’d experience your maximum potential loss if the stock price fell all the way to $0. Like any stock owner, you risk losing the entire value of the shares—except when you sell a covered call, you would keep the total premium you received upfront. MEOW rises to $130 (aka in-the-money) Let’s assume your expectation is right, and MEOW’s stock closes at $130 on the short call’s expiration date. Since this is above the strike price of $125, the call is assigned, and you are obligated to sell your shares for $125 each. Your gain per share is $15, or the strike price ($125) minus the price you paid for the stock ($110). Multiplying by the number of shares you own (100), this comes out to $1,500. You also received a $1 premium per share, or $100 total, for selling the call. So, your total gain is $1,600 (that is, $1,500 plus $100). Keep in mind, this is your maximum potential gain in this example. Even though the stock price rose to $130, the strike price ($125) of the option limits your potential gains. By comparison, if you had only bought and held 100 shares, the value of your stock would’ve increased by $2,000 — that is, ($130 - $110) * 100 shares. MEOW rises to $125 (aka at-the-money) Let’s say MEOW’s stock price closes at $125 on the call’s expiration date. Since this is at the strike price, the call should expire worthless. Once again, your gain per share is the current stock price ($125) minus the price you paid for the stock ($110), which equals $15. If the contract is for 100 shares, you would gain $1,500 from owning the stock. To calculate your total gain though, add the $1 premium you received per share for selling a call option ($100 total). In this instance, your total profit for the strategy is $1,500 plus $100, or $1,600. If you had only bought and held 100 shares, the value of your stock would’ve increased by $1,500. MEOW falls to $100 (aka out-of-the-money) Now, let’s look at what happens if MEOW’s stock price doesn’t move as you expected, and instead closes at $100 on the call’s expiration date. To calculate the decline in the value of your stock, take the current stock price ($100) and subtract the price you paid for it ($110). Multiply this by the 100 shares you own, and this comes to -$1,000. The premium you received upfront ($100) helps offset this decline, meaning your net loss is $900. If you had only bought and held the shares, your net loss would’ve been $1,000. Keep in mind, this is a theoretical example. Actual gains and losses will depend on factors such as the prices and number of contracts involved. What is the break-even point at expiration? You break even on your covered call if, on the expiration date, the stock closes at the price you originally paid for the stock minus the premium you received per share for selling the call. Going back to MEOW, you paid $110 per share to buy the stock. Subtracting the premium you received per share equals $109 ($110 - $1). If the stock closes at this price on the expiration date, the option should expire worthless, and you should neither gain nor lose money. If the stock falls below $109, you should experience a loss.@Daily_Discussion@TigerEvents@TigerStarsdo feature so people learn how to trade during earnings for options Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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