The covered call involves writing a call option contract while holding an equivalent number of shares of the underlying stock. It is also commonly referred to as a "buy-write" if the stock and options are purchased at the same time.
*REFER TO CHART: for further information:
1) Buy in lots of 100 shares TTEC
2) Current price: $36.80
3)Purchase price: $36.80
4) Number of shares purchase: 100
*Total Cost: $3,680
Option:
Buy or write: WRITE (Being the Banker or Casino and SELLING options is best...why? they always win)
Option: 20th July $40.00 Call
Price per option: 0.88
Contracts: # 1 x 100
Total cost: $88.00<--- CREDIT,goes immediately back into your account.
Max. Risk: $3592
Max. Return: $408 at a price of $40 at expiry or HIGHER
Break-evens at expiry: $35.93
This option strategy is conservative in retirement accounts, or investing. Just have to buy stocks/option at same time. If PA stays in between current PA of $36.80-$40.00 now & in between 7/20/18- you still make $88.00, then get $3,680 back in account minus margin account fees. *Is $408 in profit more then you could make in interest on $3,680 in your bank? at 1%-6%? My guess is yes. Trading is all about having a solid foundation to trade off of.
*REFER TO CHART: for further information:
1) Buy in lots of 100 shares TTEC
2) Current price: $36.80
3)Purchase price: $36.80
4) Number of shares purchase: 100
*Total Cost: $3,680
Option:
Buy or write: WRITE (Being the Banker or Casino and SELLING options is best...why? they always win)
Option: 20th July $40.00 Call
Price per option: 0.88
Contracts: # 1 x 100
Total cost: $88.00<--- CREDIT,goes immediately back into your account.
Max. Risk: $3592
Max. Return: $408 at a price of $40 at expiry or HIGHER
Break-evens at expiry: $35.93
This option strategy is conservative in retirement accounts, or investing. Just have to buy stocks/option at same time. If PA stays in between current PA of $36.80-$40.00 now & in between 7/20/18- you still make $88.00, then get $3,680 back in account minus margin account fees. *Is $408 in profit more then you could make in interest on $3,680 in your bank? at 1%-6%? My guess is yes. Trading is all about having a solid foundation to trade off of.
Comment:
Look at Monthly on this stock to see why PA turned bearish, $36-$42 is major resistance or ceiling. See $22-$25 area area as buy area for this again.