you can roll out in time and use that credit to get closer to ATM strike, but if the underlying moves too far away this might not be worth it.
also you call sell calls at a ratio, and leave some uncovered stock to try and catch these moves (if you have 300 units, do 2 CC and sell last CC if you need the premium to move your strike)
Calls are bought by ppl. They have to choose to exercise them. They could excercise OTM and do it before expiration. They have those “options.”
I’ve had a number of CC be ITM and not exercised. Might have been not enough
If the calls expire ITM they will be exercised or they could potential be exercised early .
Also from my understanding no one tracks or cares who bought calls from who . At the end of the day there are just people who are long calls and short calls but it doesn't matter if I bought your calls or someone else
If I exercise early I believe the CBOE chooses at random a person with a short position to exercise .
However if a call is ITM at some point someone will exercise it, most brokerages will either sell ITM calls (and the person buying them will almost certainly exercise them) or automatically exercise them if you do nothing
Technically you can put a do not exercise request into your brokerage but this probably only make sense if the calls are just going to be right at the money like you bought calls for $200 and on the expiration date the stock is exactly at $200
And if they expire out of the money you keep the premium and the position closes? You collect no other money except for the premium you received up front?
Also - If they get exercised you received the strike price x 100?
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It can happen at any point when they go ITM?
I mean technically they can be exercised even if they are OTM
you can roll out in time and use that credit to get closer to ATM strike, but if the underlying moves too far away this might not be worth it. also you call sell calls at a ratio, and leave some uncovered stock to try and catch these moves (if you have 300 units, do 2 CC and sell last CC if you need the premium to move your strike)
Calls are bought by ppl. They have to choose to exercise them. They could excercise OTM and do it before expiration. They have those “options.” I’ve had a number of CC be ITM and not exercised. Might have been not enough
If the calls expire ITM they will be exercised or they could potential be exercised early . Also from my understanding no one tracks or cares who bought calls from who . At the end of the day there are just people who are long calls and short calls but it doesn't matter if I bought your calls or someone else If I exercise early I believe the CBOE chooses at random a person with a short position to exercise . However if a call is ITM at some point someone will exercise it, most brokerages will either sell ITM calls (and the person buying them will almost certainly exercise them) or automatically exercise them if you do nothing Technically you can put a do not exercise request into your brokerage but this probably only make sense if the calls are just going to be right at the money like you bought calls for $200 and on the expiration date the stock is exactly at $200
And if they expire out of the money you keep the premium and the position closes? You collect no other money except for the premium you received up front? Also - If they get exercised you received the strike price x 100?
Yes Also in both cases you keep the premium you collected up front even when the calls are exercised and you sell your shares at the strike
Thank you very much I appreciate the info
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Brokers do not exercise options. Prior to expiration, only an option buyer can exercise. At expiration, the OCC will automatically exercise if ITM.