Selling a Call

Discussion in 'Options' started by switze22, Feb 28, 2008.

  1. Ok, I think Sirius will not hit $5 by March 22.

    The March5Call is right now at:

    Last: .05
    Ask: .05
    Bid: --

    So, I use TD Ameritrade, and I click on that option and it opens a trading menu.

    If I want to sell a call, I want to "Sell to Open" correct?

    Then, for the price, do I enter the ask? .05?

    Then does the money go straight to my account? And I can sell all the contracts I like?


  2. .......God, somebody, please help him!..................
  3. MTE


    1. Most likely you won't get a fill at 0.05 unless someone wants to buy the option at 0.05 and thus lifts the ask.

    2. Yes, the money does go into your account, but you also have a margin requirement since you are selling a naked short call.

    3. The amount of contracts you can sell is limited by the amount of buying power you have (margin requirement).

    4. Selling a call even at 0.05 is an awful risk/reward ratio!

    With that said, I agree with nazzdack, you are hopeless!
  4. donnap



  5. what happens to you if a miracle happens and sombody buys siri for 10 bucks? is a nickle worth that risk?
  6. MTE------You are "The Man" and have earned your way into heaven.
  7. 1. The ask is .05, so how would someone buying at that ask lift the ask?

    2. So, what, you should never sell calls this cheap or what?

    Thanks for the hostility and anger everyone. Good times.
  8. Seriously.
    I lost patience with the constant stream of silly option questions asked over and over again by traders unwilling to read a book or use the search function. Your level of patience is commendable MTE.

    Switze, never sell an option for .05, after commissions it is just not worth it.
  9. that deserves a repeat!

    also, of all the companies in the world to short calls; sirius would be the last one for obvious reasons.

    go merger!
  10. domestic------You too are also "The Man" and have earned your way into heaven.
    #10     Feb 28, 2008