Hi All,
I'm new to trading options, and I want to make sure I'm thinking about something right. I have roughly 10,000 shares of a security valued at approximately $40. I'm not quite ready to sell yet, but I could use some cash, and I'm willing to cap my upside at $50. When i view the option chain for the security, it looks like I can "sell to open" 100 August 19 Expiration $50 strike calls for about $26K. Does that amount seem right? It seems high to me, but does that sound correct? Questions
- Am I thinking about this strategy right? Is there something I haven't considered?
- What does taxation on the sale of a new opening of a call option contract look like?
- Is my math right on # of contracts? Each represents 100 shares, right? So just divide # of shares by 100?
- Is there anything else I'm not considering? THANKS!
Submitted April 11, 2018 at 12:00PM by hungarianhc https://ift.tt/2qtTAg3
