Comments on: Trades – My First Option Contract – Intel Corporation (INTC) Covered Call

By: writing2reality

writing2reality — Mon, 11 Feb 2013 21:45:25 +0000

Stumbling would be the best way to describe the first go of it! And yes, knowing when to pull the plug, on any investment, is really the hardest decision. How much of a gain is the right gain to lock in? Me? I have no idea!

As far as the expenses go, I have a post coming out on Wednesday morning that will lay some of those costs out nicely, and do a simple brokerage comparison.

By: JC @ Passive-Income-Pursuit

JC @ Passive-Income-Pursuit — Mon, 11 Feb 2013 21:37:56 +0000

I know I stumbled my way into options. But with a just a bit of practice and looking at where something went wrong you can make pretty quick improvement. I prefer to just sell puts, although if I’m looking to pare down a position then I have no problem selling calls. I really need to open up another account for my options. The big thing I struggle with right now is when to close out a position. For example the recent KO put that I sold I could have bought back and captured 43% of the premium in about 12% of the days giving a total gain of 1.58% annualized to 41%. I ended up deciding to hold off, although closing out the put would have freed up that $3750 to use for other purchases or puts.

I need to open up an options account with another brokerage because like you said if you’re selling 1 or 2 option contracts the commission/fees eats up a lot of the profits.

And thanks for the mention. Congrats on your first option and I’ll be looking forward to see what else you’ve dabbled in.

By: writing2reality

writing2reality — Mon, 11 Feb 2013 20:05:24 +0000

Thanks AAI! Certainly wasn’t my best performance, but I was able to get the feet wet! I have a couple more posts in the pipeline for my most recent two trades, both puts, as well as a brokerage cost comparison. There are some significant dollars to be kept, or lost, just by changing your broker. As far as selling future calls, I will be willing to do so provided that net premium and strike price are something that will “limit” my gains in a better manner than the above transaction.

By: All About Interest

All About Interest — Mon, 11 Feb 2013 19:39:13 +0000

Congrats for taking the plunge on your first options trade. By selling the call you risked upside potential in order to squeak out a small profit. At least you learned something and it didn’t cost you money this time. My fees ate into a lot of my options profit last year, over 15%. That’s why this year I’m trying to trade options with higher premiums. I typically only like to sell puts but if I’m willing to trim or lose shares of a company I will sell a call. I look forward to seeing more of your trades.