/biz/ - Business & Finance

>>16889573
that's a pretty big question mate

I do this with covered calls a lot. I'll sell a call a month out at 4 when it's at like 3.90 for a premium of .50. Then it'll swing back down to 3.10 a week later and I'll buy back at .05. thus netting me $45 and the chance to write another call at .50 when it swings back up to 3.90 the next week. Thus, I've spent $5 of my original $50 premium to make another $50 one week earlier than I would have if I waited till exp.

Now if underlying went to like 4.50, my call would be exercised and I would sell my stock at 4.

But in a credit spread, I dont have the shares to be called away. I have the long call to basically simulate my shares. If the underlying goes to 4.50 or higher, I would lose money. I want to stop loss against this risk.

nbrv
galt

>>15589197
the fuck, there's one right down the street from me. had no idea they were public, much less offered a divvie