/biz/ - Business & Finance

>>25094741
Shorts. Thats what we are all about. Shorting alts.

>>25094741
First off....to understand its an "option". So its an opportunity for someone to buy, not a requirement

Its 10x easier explained with simple example: I offer an option to buy BTC on Feb 1 for $25K. I charge $50 for that option.

When Feb 1 comes, you can either exercise that option or not (obviously depending on price).

If I price my options well (just out of the money) I can forever sell the options and keep collecting $50 everytime and never part with the underlying asset.

Get it?

Personally I use them on shares I want to get rid of to get regular income. Some tickers work better than others. The bad part is when the underlying has a moonshot and you get left in the dust with your tiny premium. I was selling CCs in WYNN getting about $200 per month per contract then in November it ripped higher by nearly 30%. I got assigned for $95 per share when it was trading at $110.

It's when you sell a call for a stock that you own at least 100 shares of. The call is "covered" because you own the underlying asset that the contract is attached to. You make money in two ways from them. 1 you get paid a premium for every covered call that you sell and 2 if the person you sold the call to executes the contract, you get paid the STRIKE PRICE x 100. You could also lose more money than you make potentially however, if the price of the stock goes to a level significantly higher than the strike price of the option. For this reason, covered calls are best done for stocks you're already planning on selling because it allows you to collect an extra premium for your sale.

Buying calls can be significantly more profitable than selling calls, but is also a lot higher risk.

>>25094862
>>25094970
>>25095505
Thanks for the help anons!