I'm new and this is somewhat off topic, but I really need the answer to decide if using a collar makes sense with a particular stock I own. I already owned shares of a stock which is now $314. My cost basis or unit cost is $257 (because I bought it over time). If I sold a covered call using these shares at a strike price of, say $320, in 30 days, and it the stock went to $321 in 30 days, what happens to all of the value of my early shares a purchased before the $314? Do I get the capital gain for the lower priced early shares? Is that not too big a risk? Thanks.
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This is a pot of gold! Thanks Dan! Thanks Optionsplay!
Thanks for watching!
Thanks again!! I always learn something new or u engage me to think about things differently!!
Happy to hear that!
A fairly simple topic made unfathomable
Thank you Dan, you are an outstanding coach.
Thank you for your support!
Thank you for the overview!
I'm new and this is somewhat off topic, but I really need the answer to decide if using a collar makes sense with a particular stock I own. I already owned shares of a stock which is now $314. My cost basis or unit cost is $257 (because I bought it over time). If I sold a covered call using these shares at a strike price of, say $320, in 30 days, and it the stock went to $321 in 30 days, what happens to all of the value of my early shares a purchased before the $314? Do I get the capital gain for the lower priced early shares? Is that not too big a risk? Thanks.
Isn’t the covered call graph wrong? The stock line crosses the x-axis at 477.30 and the cc line crosses at 470.96, not as shown.
your cost is that you limited your upside. That's how all of these work.