I sold cash-secured puts on SPY and QQQ. If they exercise and I buy the shares, the wheel strategy says to immediately sell covered calls. What if the current price of the shares is well below my buy strike price on the exercised puts? Do I sell covered calls with a strike price LESS than my buy price?
Hello. I’m an older person 6 years from retirement. I am pretty conservative with my IRA and am considering a covered strangle on SPY. I write covered calls on SPY all time but I am interested in selling cash secured puts on SPY as well with the same expiration date as the covered calls. I would sell the same number of covered calls as covered puts simultaneously, again, with the same expiration date. 2 questions:
1). Do you consider this a good strategy?
2). To sell covered puts, do I enter an order to “sell to open” and the cash to secure the purchase of shares at the strike price are held and not available to trade (I do not have a margin acct)?
Thank you for your help.
Hello. I’m an older investor and do not invest in options at all. I’m thinking of buying to open a call option (1 option contract at $10 for a total cost of $1,000.00). What is the most I could lose on this trade? I think it’s my initial cost of $1,000.00 but I want to be sure. Any help would be appreciated.