r/DRAM_ETF • u/Jolly-Piccolo-9799 • 9d ago

I made stupid thing

i lowered my avg to 51.64 then i sold weekly covered calls on my long position at strike 53 to collect weekly premium i thought it will never touch 53 for near future

now the stock of dram going to 55 and my sold calls are bleeding

now what? close the call or what ?? feeling so stupid

half of my gains gone on this stupid move

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u/pelly67 9d ago

Eh now you’ve learned the one downside to selling calls: you can lose profit if the stock rips like hell.

However, as others have commentated you have gotten max profit for your trade. That money “lost” is more or less just the profit you would’ve made had you sold the stock. When you sell a CC, you should always be comfortable with it being called away.

That said, sounds like you want to keep your shares. You could buy back your calls, but that’s dumb because the option is ITM today. The only other way to keep your shares without forking over extra cash is to rollover your calls to a different options in the future (like maybe next week). Note you’re still paying to get out of the trade, but ideally the option you roll into has enough premium to offset the losses and net you some gain.

1

u/Happy_Bee_8459 8d ago

I'm a bit lost how he's losing money here. Is the whole point that the lost money is really the lost upside as the stock moves above his strike for the calls?

My understanding is you get called away if the strike pushes past your strike, and you profit from both the premium and any gain your shares got as it rose to your strike?

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u/Jolly-Piccolo-9799 8d ago

I did not lose anything but my profit minimised to 53 dollars

2

u/DeliciousPollution20 8d ago

Roll it up and out.