I hear covered call sellers are making a killing in this market

Discussion in 'Options' started by stock777, Aug 1, 2007.

  1. hmm
  2. MTE


    I'd say they are getting killed not making killing.:D
  3. Yeah right
  4. Yep, time for a killing, um-hmmm....

  5. nikko309


    Covered call sellers ALWAYS make money on their calls.

    It's the underlying stock that they have a problem with :)
  6. volatility is the covered call writers best friend and VIX is at a 52 week high. Premium is rich so covered call strategies are bringing in good $$$. that doesn't mean they can keep pace with the market, however.
  7. But my broker told me they were the most conservative option play.
  8. Fat premium on a stock dropping is like using a bed sheet to catch an elephant. If a stock drops from $60 to $45 the $3.00 call you sold does reduce the sting a tad but the stock losses can still be significant.
  9. The pump in the VIX is a case for having bought options already not sold them. The covered call crew is taking hits for the reasons already outlined. Those small premiums they took in may help a bit but the stock tanking is the real hit.
  10. nikko309


    And on his honeymoon, he told his wife, "This won't hurt at all."

    #10     Aug 1, 2007