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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: gastrodoc who wrote (21987)7/24/2011 6:56:52 PM
From: wilywilly  Read Replies (1) | Respond to of 223379
 
gastrodoc,
If you already own the underlying security, at TD Ameritrade you would "sell" calls (click the "bid" price on the call you want to sell in the option chain). Set the # of contracts to be 1 per 100 shares that you want to write against.

A "covered call" trade would buy 100 shares per contract of the underlying and write as many contracts as you specified, as a single transaction. This saves a commission if you are opening a new stock position and want to write covered calls against it at the same time. This is also known as a "buy write" transaction.

en.wikipedia.org



To: gastrodoc who wrote (21987)7/24/2011 7:30:11 PM
From: GROUND ZERO™  Read Replies (1) | Respond to of 223379
 
Okay, if you own the underlying stock, which you should own for a covered call position,then you're going to "sell to open" a call... selling the call is the same as shorting (or writing) the call... later on, you would "buy to close" that call... each call or put typically represents 100 shares... so, if you have 300 shares, then you could sell 3 calls and take in that money...

GZ


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