cover calls-regular income from the stock market?

sarathc · #41 11th July 2006, 09:42 PM

Quote:

Originally Posted by swagat86

im sorry vince i didnt get u. In icicidirect.com u can go long and short simultaneouly. which iv done before.

Swagat86, this is interesting, I am still wonder whether it is possible 100% for sure. By any chance had you tried with futures contracts over the same underlying but expiring in two different months?

If it is the same month's contract, your position would have got squared off with realized profits/losses (and ofcourse brokerage charges).

And, if the buy and sell prices of the contract are the same, one will be in a net loss exactly equivalent to the amount of brokerage (+service tax on it) paid with no position being carried overnight home - what would be the rationale such a trade in the first place? One can simply avoid both the trades, right?

hsarora47 · #42 21st July 2006, 10:21 AM

COVEREED CALL WRITING:
Beware!!!!!!!!!!There is a big catch.
If the stock goes up substantilaly, you may end up giving many times more. Ofcourse, u will get your premium.
Example : India Cement--I bought Inda Cement @160. I wrote 160CA call at Rs 10. I got Rs 29000. However the stock went up from Rs 160 to Rs 189., and the option ws called by the buyer. I had to pay Rs. 84000-29000= Rs 59000. Ofcourse the stock had appreciated but the fact remains that I earned only Rs 29000 against my stock appreciation of Rs. 84100.

swagat86 · #43 21st July 2006, 11:59 AM

the fact is that u still gained and 2nd ur sure u gonna gain. We r talkin of regular income.So u still make money.

swagat86 · #44 21st July 2006, 12:06 PM

the fact is that u still gained and 2nd ur sure u gonna gain. We r talkin of regular income.So u still make money.

kdnitinkalra · #45 10th April 2007, 02:05 PM

hello,
i want to know how to write covered calls(also called buy write stratergy) on stock ,which i purchased say for example gujrat ambuja at rs 102/share,which has a lot of 2062 parcel of shares.i wrote a call option against shares purchased at 105 strike price to collect time premium. is it possible through icicidirect.com website?
which other brokers allow you to sell covered calls and sell naked puts
will i have to pay 20% margin for selling a call option which will change daily mark to market,or my shares will be used as a collateral by options clearing house.what will be scenario at expiry?will my stock be called away if share price is above 105 or i have to cash settle sold option transaction individually offsetting loss above 105 by gain in the underlying shares i own.

anjanr · #46 10th April 2007, 10:11 PM

there are few strategies in covered call. u can sell an ATM option and get maximum time premium and buy future. same way u can sell OTM call, but downward risk if stock falls is also less. i think bext way is sell ITM and buy future. in this way, though time value is less, the downward risk is covered. only problem is if the call gets exercised as it american type is stocks, u will not get full time value. the best thing is to do on nifty as it in european style and can't be exercised bef expiry

spot · #47 11th April 2007, 12:58 PM

Sundar

Instead of it, I would like to suggest you that you that you buy Nifty PUT & CALL out of money and you will earn money in Valatile market either side. I think it is safe. I done it and earn three time in last Month - March 07. You will earn every month because Indian Market always Volatile at least once in a month.

loosingstreak · #48 28th June 2007, 06:27 AM

Hello Friends,

I am posting a hypothetical covered call trade and would like advice on how this trade could have best been managed.

The trade is long NF @ 4290 short 4300 call Jun 07 @93 taken on 1-Jun 2007.

Since the nifty has been in a sideways to down move since then how should this trade have been dealt with.

Thanks for any guidance you folks can provide.

coolguru007 · #49 28th June 2007, 03:01 PM

hey anyone who can give calls on yahoo plz post their id

loosingstreak · #50 29th June 2007, 06:47 AM

Quote:

Originally Posted by loosingstreak

Hello Friends,

I am posting a hypothetical covered call trade and would like advice on how this trade could have best been managed.

The trade is long NF @ 4290 short 4300 call Jun 07 @93 taken on 1-Jun 2007.

Since the nifty has been in a sideways to down move since then how should this trade have been dealt with.

Thanks for any guidance you folks can provide.

Come on guys. So many experienced traders around and not a single view or opinion on how the above trade could have been managed ?

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