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thisisthetaa OP t1_j6lai6g wrote

Reply to comment by DakkJaniels in 2nd time making a covered call: 1600 shares of Carvana at $8.43. 16 $9 calls sold at 0.71 a call by thisisthetaa

no because the first thing I hope to do if that scenario plays out is to buy back the call just before expiry and get rid of the shares instantly anyway like it’s a hot potato.

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DakkJaniels t1_j6lasjd wrote

Why would you rather pay money for an option to buy it back, rather than letting it expire worthless? Yeah, I get closing out the position from a risk standpoint if they were OTM, but why are you selling covered calls if you want to buy them back when they are in the money?

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thisisthetaa OP t1_j6lb6c3 wrote

wait hold on if it’s 8.99 it’s out of the money and by expiration all that would be left for the most part is the intrinsic value. I was just going along with your scenario. Correct me if I’m wrong.

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DakkJaniels t1_j6lbeku wrote

Yes, I don’t understand why you want your covered calls to be ITM. Being slightly OTM is the best scenario, you keep the premium and the stock.

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Weird-Status-287 t1_j6n1ler wrote

Is OP trying to get fancy with buying and selling things to make a little more than he could by just selling now?

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DakkJaniels t1_j6nm6si wrote

Sounds like a fancy way of just making less money than he would have if he didn't sell the calls lol

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