Cost basis is 460 but the stock is nowhere near that due to the recent market beating. Selling near-term CC pays me only 0.6 premium per contract. Is there any way to generate more income from holding the stock while I wait for it to recover? Thanks!
Speaking hypothetically, by writing covered calls you are synthetically short a put. Why not sell the stock and sell the ATM put naked, or sell OTM bull put verticals until you think GOOG is going up? Alternatively, if you do not want to realize the loss in GOOG one might buy ATM or slightly OTM puts to hedge your position, then sell a ratio of OTM call verticals to finance the hedge. Or, you could keep writing the covered calls and use the proceeds to buy an OTM put to hedge your stock position. Or, you could sell the GOOG stock, and use the proceeds to go out a buy a copy of Option Market Making by Baird, Dynamic Hedging by Taleb, Perception and Deception or Hidden Reality by Cottle, and save yourself a lot of money in the long term. -segv
If you expect GOOG to continue down before recovering, reverse your position into short (short the stock, buy a put, open a bear vertical). GOOG seems to be in an intermediate term down trend. Don't get married to your long GOOG position if you don't love it! <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1078965>
To enter short GOOG you might want to wait for an entry signal. It might come at an even better level than the last Friday closing, i.e. 380-385. <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1078977>
Just bought Jun 380 Put to get my downside risk hedged. Looking to sell Jun 460 Call to lower the cost of the put with a collar.
So you are "down" another $14/share. First of all "Don't panic." And don't try to make it all back at once. I'll probably get a lot of flack, but another book to consider, in addition to the ones already mentioned, is "Generate Thousands In Cash On Your Stocks Before Buying or Selling Them" by Samir Elias. It's kind of shlocky. It contains almost no theory, no mention of greeks, and doesn't even name the strategies used. But it does point out the need to use TA ("Use fundamental analysis to decide what to buy and technical analysis to decide when.") It's a practical guide to make money in situations like yours. I think it's only available from the website now (www.generatethousands.com).
First off, Do NOT do this. But....... So you say that you're into GOOG for 460? Looks like you bought it in January. Here's an idea, and I do not want you to do this! But, depending on your account equity, overwrite the January 500 calls($14), and don't think about buying another share of GOOG until it closes above 430. Got 500 shares? Write 10 calls. Now before I get flamed here, I want to repeat that you should NOT do this. But if a person was a very high net worth gunslinger............. (just having a little fun here)