Covered Call (1 Aug 11)

Covered Call (Stocks)

When selling a Call option on stock that you own, you are giving someone the right to purchase (100) shares at a specific price (strike price) on or before a certain date (expiration date).  In return for this right, the option buyer pays you a premium that is yours to keep regardless of whether the option is exercised or not.

CVI Energy Inc (CVI)

Buy (100) shares @ $26.85

Sell to Open (1) Aug 11 30 C @ $0.45

Net Debit: $26.40 ($2,640.00)

Max Profit: $360.00

Return If Assigned: 13.6% (20 days)

The goal of the Covered Call writer is to generate 5%-15% returns or more on a monthly basis on stock that is owned with no more risk than owning stock outright.

All positions displayed are for educational purposes only and are not intended to be recommendations.