You need to be willing to let Ford get called away at $18.50. It seems you still may not understand the $650. and having to pay it. You don't pay it...You let your "option get called away" at $18.50. Bye bye...I am sure you were shocked when you saw a negative amount on your option!! I know I did the first time I wrote a covered call...About 25 years ago. You could buy back your option, but that could get confusing. I think you would probably be best to digest this option till expiration. Figure out if and how you made money through Friday. You do not pay the $650. That is what the other side would make if it rose quickly. You would make (in general) $100. ($17.50 to $18.50) + the $17. minus fees.
and I would be fine with that if they went bye bye Someone suggested to me on Reddit, that if I was comfortable with buying those 100 shared I did at 17.50..Instead I could had sold a covered put with a strike price of 17.50 .. that way , if it never hits the strike price I could just collect premiums. If it did hit the strike price, its ok because I wanted to buy them anyway at 17.50 As for what it says right now for my ford covered call.
If it gets called away, take the $117. and learn what happened. If it's your first time, there are things you need to understand before moving to more complicated trades. Come Friday (if called away) the option doesn't have to be exercised until (I believe) Saturday at noon eastern time. Examine the fees going into and out of this trade. Know the 30/31 day rule from the IRS concerning buying Ford again. If called away, when will this money be available to trade again (if you wish) on something else...It's called execution and settlement dates. Also calculate what would happen if Ford dropped on Friday to $17., or $16. per share...Was it worth the $17. option money (minus fees). Again, just glean the info first...
Yes because even if it goes down, its not a concern. Ford has been around a while, their stock value for the last 10 years the SMA is only about 12.30 ish I think. But it has been on an upward trend. With new technologies and them getting into Electric Vehicles, I feel confident they will stay up and possibly go higher. But even if they dont, and even if they go down in value, its not money lost at all. Unrealized loss, but in the end its not a loss unless I sell it. Now was it worth the 17 , sure. Because this was more just getting a hands on experience if anything else. They next thing I will mess with is selling covered puts for a stock I am waiting to buy at a set price. I could sell OTM a good ways and dwell and do a slow grind of 1 maybe 2 percent gain on cash per week. I dunno what I will do yet. Just getting my feet wet for now. As for the 30/31 rule, yes I cant use loss from a sale if I buy that stock again. There are tons of other stocks out there I can mess with until 30 days have passed. I would have to have a calendar or something that keeps track of when it is clear to re-buy something.
Since this expires tomorrow, it looks like it may expire OTM.. So i still would have my shares. But lets say I want to roll this, I never done this, so I pulled up my account, had the option to roll.. I picked the same strike price of 18.50 with next friday as expiration . ( I am not doing this now, but I might do it tomorrow) I just want to make sure I understand everything. Since I am now buying to close, it looks like I would be paying the .07 ask price? So I am going to say bye to 7 Dollars ? But when i roll it with the new sell to open I will be getting back 27 dollars correct? minus the .65 cent fee.
The answer would be yes, (but I don't know what the future Ford options look like). It is highly unlikely that this option will get called away. You understand in real life you should probably let this option expire out of the money, and wait to write the next option. You probably should be patient...You do not have to write the next option on Monday. You may want to wait a few days to see if Ford rises...Better price for the option. But, Ford could drop and you kick yourself for not having written your covered call. I want to talk about two other things. Fidelity will do hand holding and help as long as you have a lot of assets under management. I know in the beginning it can be tough...You do need the hand holding. But, the smaller the assets, the more likely Fidelity will be unwilling to spend a lot of time on the phone to walk you though your trades. On the other side, Fidelity knows there will be a lot of generational wealth coming down to younger people. Parent/grandparents die and young people will gain a lot of assets. If you have a good relationship established with Fidelity, you will probably deposit $$ once you inherit money. The other thing is the paperwork for the buy to close. Really...$7 bucks. The 7 bucks makes sense if you plan to become a day trader...Learning the ropes. But come tax time or having to take the time to reconcile trades, will take time and effort. You could be doing something more productive with your time. You could be flipping burgers at $15. an hour somewhere. Or, you could be enjoying your afternoon. Just saying don't let a $7. trade consume you...
I have been lucky so far, and the last guy I got on the phone was by far the most helpful person. His name was Dave Stiporow or something like that. He was very professional, talked professional, was very respectful and told me this is what he is there for to help out for any questions I have. With that being said, I do acknowledge what you said about parents / grandparesnts passing away and inheritance or whatever passing down. So , we never know when we will die, who will die at whatever time , but the " norm" is our grandparents die first, then our parents, then us. My grandparents had nothing to pass down. My mother and father though, they both worked their asses off. My Dad was Navy Career, and then Post Office Career. He was never a spender other than loved playing slot machines on the weekend at local bar with mom. My mother worked her career at the IRS. So both of them, government jobs, high paying jobs, lots of benefits and investing 401k money market etc.. I was the only child, and I would have got everything from them, but my cousin lived a horrible life of heroic addict, etc.. got pregnant twice, bore to children. She couldnt raise them, so my parents ended up having to adopt them else the kids would be in the States hands. So, when i was about 33 I ended up gaining a brother and sister who are newborns. So now inheritance will be shared between 3 of us instead of just me. Regardless my parents saved a lot of money, invested a lot.. all of that will be divided between us 3. So at some point in time, I would be coming into a nice chunk of money, at least a few hundred thousand. I dont count on that money. Anything can happen. But regardless it is a possible huge income in the future. I also hope to get a decent amount of money from a class action lawsuit from a drug company who continued a drug when they knew it was damaging peoples kidneys and other stuff.. My kidneys work about half of what they should. Who knows how much I will get , but once again if its anything at all , I will invest it. Any money I get that I normally wouldnt get.. unrecognized income I know thats not the name, but money I wasnt expecting to get.. I put into Fidelity and invest it. Like I just got Pell Grant money from FAFSA for being in college. I had no idea I could sign up for it because the VA center pays for my schooling. So I ended up getting 6500 dollars. I put it all into Fidelity account. I invested about 2/3 of it, and the last 1/3 is sitting waiting for me to invest it in something. I know everyone invests for whatever reason. I never did it my entire life, now at 49 I am doing it. Honestly I dont really need to. I have no one to pass my money down to. When I am gone, thats it.. the money goes no where , unless I donate it to the Church, Charities etc.. So i really have no need to invest, I do it just to see what I missed out on my entire life. I do it as a hobby. So if I lose money or gain money, it really makes no difference to me because I have no heirs. I have no love of money, or greed of it like many people do. I am not a materialistic person. Anyway enough of my long winded post. In short, yes I agree that they expect younger people getting inheritance.
LOL I missed out on this part of your post. I read it but forgot to comment. I am a college student, full time, senior , graduating in a couple months with a B.A. in Computer Science Networking and Cyber Security. Since I am a Disabled Veteran, my intention is to work at the VA Center. I will be turning 50 this year. Very late to be getting into a career job like this. I probably will do it for about 10 or 15 years.. then just retire..or whatever..