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DakkJaniels t1_j6la6cz wrote

Reply to comment by thisisthetaa 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

wouldn’t you rather it go to 8.99 so you keep the premium and the shares? Also, “at least you are in the money”? Why would you want your covered calls to be in the money?

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thisisthetaa OP t1_j6lai6g wrote

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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