Jumboloan, my reply just got zapped. I'll try again.
If my call is exercised at a strike price above my purchase price or my net debit, I'm okay with that. I can buy the stock back or sell puts on it in the hope that I can buy it at a strike price that is below my call strike.
If the call option price on the day before the stock goes ex-dividend indicates that the stock is probably not going to be called, I'll hold on and see what happens.
If the call option price. is below the dividend, the call probably won't be called, but you don't know for sure.
If the stock is trading way above the strike on an ex-dividend day, it probably will be called. Then you have to decide whether it's worth buying the option back at a loss or just let the stock go and sell puts on it.
Jumboloan, Yes, I can get called before ex-dividend. If my strike gives me a bigger RoR than the dividend, I'm ok. If my strike is below my purchase price and the stock gets called, the stock probably is higher than it was when I wrote the call. If the stock is called on a trade where I lose money on the purchase price, I wait 31 days before I trade the stock or options on it again. Then I sell puts on the stock if I still want to own it.
On the ex-dividend day, sometimes the option is trading for less than the dividend and I can buy the option back, collect the dividend and then sell call options at a higher price and later expiration price.
If the stock is called at. a price above my net debit price after I've collected options premiums and dividends, I'll take that profit unless I can trade my way out of it profitably.
If you have a trade in mind, tell me what it is and we can discuss it. This is not trading advice. It is meant to be educational.
Thanks for the question. If I'm not clear, we can discuss this again.
Jumboloan, my reply just got zapped. I'll try again.
If my call is exercised at a strike price above my purchase price or my net debit, I'm okay with that. I can buy the stock back or sell puts on it in the hope that I can buy it at a strike price that is below my call strike.
If the call option price on the day before the stock goes ex-dividend indicates that the stock is probably not going to be called, I'll hold on and see what happens.
If the call option price. is below the dividend, the call probably won't be called, but you don't know for sure.
If the stock is trading way above the strike on an ex-dividend day, it probably will be called. Then you have to decide whether it's worth buying the option back at a loss or just let the stock go and sell puts on it.
Thanks for the question.
Jumboloan, Yes, I can get called before ex-dividend. If my strike gives me a bigger RoR than the dividend, I'm ok. If my strike is below my purchase price and the stock gets called, the stock probably is higher than it was when I wrote the call. If the stock is called on a trade where I lose money on the purchase price, I wait 31 days before I trade the stock or options on it again. Then I sell puts on the stock if I still want to own it.
On the ex-dividend day, sometimes the option is trading for less than the dividend and I can buy the option back, collect the dividend and then sell call options at a higher price and later expiration price.
If the stock is called at. a price above my net debit price after I've collected options premiums and dividends, I'll take that profit unless I can trade my way out of it profitably.
If you have a trade in mind, tell me what it is and we can discuss it. This is not trading advice. It is meant to be educational.
Thanks for the question. If I'm not clear, we can discuss this again.
But Donald if trade with these higher dividend stocks don’t you get called the day before ex-div so you lose the dividend? That’s what happens to me .
Marie, welcome and thank you. If you have any comments or questions, I'll be happy to discuss them with you.
Don
Very informative...just started following you...I like your incite and approach...thank you...