Still trying to understand options, could use some help. I liked the idea of covered calls, and wanted to give them a shot on FB, which I own stock in.
Online it says that to do so I need to own 100 shares of a stock (which I obviously don't). Why is that? Can't I own one share of FB, sell a single call, and bank the premium off that? If FB is below strike at expiration, I simply bank the premium of ~4$ (monthly call with strike 5$ above current price). If it's trading above strike, whoever bought my short call exercises it against me, and I essentially give them the FB share I already own and receive strike. Why does any of this require 100 shares as opposed to 1?
Submitted October 28, 2017 at 04:58AM by anirudh6459 http://ift.tt/2iFhNQ9
