I want to write 500 covered calls. Will this have an issue with the price dropping. Etrade pro has an option that lets me hide the order and sell them in groups. Would this be the right thing to do?
I am thinking of selling the DEC strike 16 calls for 50K GE shares (AVG price 11.20) so I can collect 60 cents so I can collect 30,000 dollars. but will dumping 500 calls on the market at once cause the price to drop below 60 cents or will the other option do it in chunks via the etrade pro trick be better (dump them in chunks of 30?)
If you're concerned that your order may affect or be seen by other traders then a hidden order is appropriate. This hides the entire order. There's another type of hidden order that publicly displays only a specified portion of the order (don't know if E*Trade offers it).
Daily volume on the ATM strikes is close to 100k contracts. So, no, I don't think selling 500 contracts will move the market much.
500 is nothing for the market oabsorb looking at the daily volume and OI in that strike. I always find it interesting that people with 3/4ers of a million tied up in one stock need to ask total strangers for advice.
What don't you understand? ET is the place where people with 3/4 of a miilion in stock go to ask questions of people with 5-10 million of stock.
Well at least he is doing better that the multimillionaires who blindly handed over money to Madoff, no questions asked