Feel free to roast me over this. My excitement will drown out the noise.
Quick summary, using call options, I took 55k to 250k, back down to 45k from the massive crash this year, and now it's back up to around 227k. Now that it's around this level, I want to start converting those call options into regular stock once it gets into the 350 range. That means I'm going to buy around 250k-300k worth of TSLA stock.
My question is regarding selling covered calls. Let's say, I buy 100 shares at 350 and sell a Jan21 $400 call option and pocket around 5000 in premiums. From my perspective, if the SP hits 400, I would have just made 50 dollars/share profit on top of the premium I get to keep. If the SP does not hit 400, I get to keep the premium + keep the shares I already want to hold anyways.
And for whatever reason, if it crashes down under 275 or so, I'll just switch again from selling call options to buying call options and wait for it to bounce back. Is there any surprise downside to my evil, master plan that'll catch me by surprise? I understand that I'll be losing the upside if it does go over 400.
Thank you and much appreciated.
Quick summary, using call options, I took 55k to 250k, back down to 45k from the massive crash this year, and now it's back up to around 227k. Now that it's around this level, I want to start converting those call options into regular stock once it gets into the 350 range. That means I'm going to buy around 250k-300k worth of TSLA stock.
My question is regarding selling covered calls. Let's say, I buy 100 shares at 350 and sell a Jan21 $400 call option and pocket around 5000 in premiums. From my perspective, if the SP hits 400, I would have just made 50 dollars/share profit on top of the premium I get to keep. If the SP does not hit 400, I get to keep the premium + keep the shares I already want to hold anyways.
And for whatever reason, if it crashes down under 275 or so, I'll just switch again from selling call options to buying call options and wait for it to bounce back. Is there any surprise downside to my evil, master plan that'll catch me by surprise? I understand that I'll be losing the upside if it does go over 400.
Thank you and much appreciated.