BUY TO CLOSE Covered Call Strategy | Simple Option Trading

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Chapter
0:00 Introduction
1:16 How Selling A Covered Call Works
4:35 A Covered Call Example
5:36 Executing A Buy To Close
7:24 Calculating My Profit

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=== DISCLAIMER ===
Everything that I share in all of my videos is for entertainment purposes only. Do NOT take ANYTHING I say or show as financial advice, I am not a financial advisor. I do NOT have any financial education, skills, or special knowledge. I am just a guy with a youtube channel that I use to share my simple options trading activity. I think that the stock market is too risky for anyone to enter since the majority of the people that try to invest in the stock market end up losing their money.

[SimpleOptionTrading]

Get more tips and tricks in my Simple Trading Room community

[JAT]

You explained this very well. Thanks!

[mateovukelic]

Seems to me the Crypto market is gradually crashing and there no way out of it. I lost $10k investing into Crypto😭

[Simonjose]

Just to be sure... you had 8 days left before expiration in which you could have collected the whole premium if the contract expired worthless, but you just closed it early to be safe, while still keeping over 97% of the profit 📈.?. 👍 Might as well 🤷 😉

[freddrake]

Thanks. Your explanation was very clear.

[juanjosehuayhuallerena]

Thanks u so much for the video! I have some questions about the last part of the operation. When you said that I have to re-buy a LONG CALL. Do you refer to RE-BUY the same option that I SOLD (SHORT CALL). In that case, I have to BUY to the other part that bought at the first time my short call. I don't understand who buys this new call to close my short call.

[deadondave]

Hi there. What was your original contract expiration date ?

[jonathanklip]

Amazing video……. And one question…… how you do it if the covered calls it’s deep in the money, and below my initial stock buying price?

[DyslexicAnaboko]

So I keep getting confused about closing. Let's say you have 100 shares of XYZ and you want to sell it at $15 a share.
You buy a covered call option at a strike of $15 - in this scenario I don't care if I am ITM or not. Selling off my shares is desired even if the stock price goes far above $15 in the end.
So I would:
1. Sell to open for a strike of $15 for 3 cents a share or something pathetic
2. What happens if I just wait out the whole contract and my strike is never hit? I just collect the full premium right?

In other words, there is no obligation to buy to close - but as a strategy you CAN do this if you want to retain your shares. Of course if you don't find a buyer, you are screwed.

[rphrules]

Very good explanation thank you. Question thigh, why not just let it expire and collect full premium? Could there be a financial disadvantage in letting it reach expiration?

[catseatcheese]

I sold 5 covered calls of riot at $16 (1 week)--premium received was $225. Now, 1 day before it expires, the stock is $17.50, and I have to pay $985.00 to buy them back! I want to keep the 500 shares, but I can't afford $985. Can you tell me what's going on with this? I'm so confused.