When you sell a Covered Call you always make money
Right?
Wrong
But you always get PAID for selling that call so HOW do you lose money?
If the stock runs up way beyond your strike price you LOST capital gains
It’s important to account for such losses when you sell CCs… twitter.com/i/web/status/1…
Technically yes not LOST money but gains limited. But the CC lost you money compared to if you hadn’t done anything. At least for the time being.
If you buy the shares back at exactly the same price as you lost them, then you erased your losses
Apr 23, 2023 • 7 tweets • 2 min read
Looking to sell Options?
Like Covered Calls or Cash Secured Puts?
Then knowing the Greeks can help you make more informed decisions
The Greeks are a set of metrics that measure different aspects of options contracts