Comments on: Selling Naked Calls on SFLY - Accepting Risk http://mytradersjournal.com/stock-options/2008/04/24/selling-naked-calls-on-sfly-accepting-risk/ Investing in Stocks Through Options Wed, 08 Oct 2008 11:45:35 +0000 http://wordpress.org/?v=2.6 By: Alex Fotopoulos http://mytradersjournal.com/stock-options/2008/04/24/selling-naked-calls-on-sfly-accepting-risk/#comment-3307 Alex Fotopoulos Mon, 28 Apr 2008 23:35:39 +0000 http://mytradersjournal.com/stock-options/2008/04/24/selling-naked-calls-on-sfly-accepting-risk/#comment-3307 As an unchecked answer, I'd GUESS on covered calls it's 80+% since I generally write them in the money, meaning the strike is lower than the current price of the stock and if the stock stays flat or goes up it gets called away. For puts it's maybe 10-15% since I write out of the money, meaning the strike is also lower than the current price of the stock and if the stock stays flat or goes up I get to keep the premium and never have to buy the stock. Actually either way I get to keep the premium. It's just if I take a loss on the stock with it or not. Aside from January of this year my % were evenn better than that. My goal is to not have stocks assigned, but play is smart enough to have the cash ready if they do. As an unchecked answer, I’d GUESS on covered calls it’s 80+% since I generally write them in the money, meaning the strike is lower than the current price of the stock and if the stock stays flat or goes up it gets called away. For puts it’s maybe 10-15% since I write out of the money, meaning the strike is also lower than the current price of the stock and if the stock stays flat or goes up I get to keep the premium and never have to buy the stock. Actually either way I get to keep the premium. It’s just if I take a loss on the stock with it or not. Aside from January of this year my % were evenn better than that. My goal is to not have stocks assigned, but play is smart enough to have the cash ready if they do.

]]> By: Jeremy http://mytradersjournal.com/stock-options/2008/04/24/selling-naked-calls-on-sfly-accepting-risk/#comment-3306 Jeremy Mon, 28 Apr 2008 22:22:17 +0000 http://mytradersjournal.com/stock-options/2008/04/24/selling-naked-calls-on-sfly-accepting-risk/#comment-3306 Thanks for your response. What would you estimate is the percent of time that an option contract is exercised against you whether it be for the puts or calls you've written? Thanks for your response. What would you estimate is the percent of time that an option contract is exercised against you whether it be for the puts or calls you’ve written?

]]> By: Alex Fotopoulos http://mytradersjournal.com/stock-options/2008/04/24/selling-naked-calls-on-sfly-accepting-risk/#comment-3296 Alex Fotopoulos Fri, 25 Apr 2008 16:20:16 +0000 http://mytradersjournal.com/stock-options/2008/04/24/selling-naked-calls-on-sfly-accepting-risk/#comment-3296 It can NEVER happen after expiration day because the option has already expired as in the contract you agree to is now worthless.  It's rare before expiration day, but happens sometimes. Here's where I wrote about it happening on NVDA to me a couple months ago - http://mytradersjournal.com/stock-options/2008/02/15/nvda-option-assignment/. Here's where it happened to me on Boeing (BA) last November - http://mytradersjournal.com/stock-options/2007/11/14/option-assignment-boeing-co-ba/ It tends to happen when an option gets deep in the money (typically because you've sold at a bad strike as in my two examples), but that's not a guarantee. The benefit to the naked put writer is that you can immediately write (sell) a covered call on the new shares you own rather than having to wait until options expiration. Basically it gives you extra time value to sell. It can NEVER happen after expiration day because the option has already expired as in the contract you agree to is now worthless.  It’s rare before expiration day, but happens sometimes. Here’s where I wrote about it happening on NVDA to me a couple months ago - http://mytradersjournal.com/stock-options/2008/02/15/nvda-option-assignment/.
Here’s where it happened to me on Boeing (BA) last November - http://mytradersjournal.com/stock-options/2007/11/14/option-assignment-boeing-co-ba/
It tends to happen when an option gets deep in the money (typically because you’ve sold at a bad strike as in my two examples), but that’s not a guarantee. The benefit to the naked put writer is that you can immediately write (sell) a covered call on the new shares you own rather than having to wait until options expiration. Basically it gives you extra time value to sell.

]]> By: Jeremy http://mytradersjournal.com/stock-options/2008/04/24/selling-naked-calls-on-sfly-accepting-risk/#comment-3295 Jeremy Fri, 25 Apr 2008 14:52:58 +0000 http://mytradersjournal.com/stock-options/2008/04/24/selling-naked-calls-on-sfly-accepting-risk/#comment-3295 Hi, I enjoy reading your blog as I am trying to learn options strategies to try with real money someday. One question - have you ever been assigned a stock on any other day than on / after expiration day? Hi,

I enjoy reading your blog as I am trying to learn options strategies to try with real money someday. One question - have you ever been assigned a stock on any other day than on / after expiration day?

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