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TFC Commodity Trading Forum

Re: RIMM/Continues to Rally/ TVIX / ceejay

Something that many do when they are concerned about their stock holdings topping out but don't wish to sell as they are hung up on keeping those dividends coming in or don't want to trigger taxes etc is they sell Call Options that are out of the money well above the present stock prices. So unless prices rally well beyond the present lofty overbought price those sold Call Options expire worthless and you keep 'all the money' they brought in. Worst case scenario is prices rally well above the Call Option price you sold at and they call away your stock at that very high price. Not such a bad thing either as if you wish to own that stock you can purchase it back again on the 1st correction dip down. Many stock holders sell Call Options for income when their stocks are at high overbought prices as everyone is a wild eyed bull at tops and cheerfully buy those overpriced Call Options. Great way to make money if you don't mind holding stocks. Some make more money sell those Covered Calls than on the stocks themselves that rise and fall with the broad market.