09-27-2021, 12:10 PM
(09-27-2021, 11:29 AM)Dividendwayfarer Wrote: It looks like my XOM shares under covered call at $60, expiring at 10/15 may get called away. I thought it’s pretty safe to set it at 60 when I sold it and no idea it goes up so much and so quickly.It's part of the income/hedging game. If you are going to do it you have to look at all of your actions through up and down markets. Some months you sell ten covered calls and they are all just easy money. Next month 3 or 4 tickers run on you and it looks like a bad plan.
About the only advice I have is never sell a call that leads to a big loss on the shares you hold. ou have to be patient and get close to your basis. Don't sell calls on your core positions anywhere near the money. IMO you need to believe in something long-term or you aren't investing. Sell calls on market darlings and you will give them away soon enough and regret it. I've certainly done that.
Oil is what it is. Look at a 10 year chart on XOM and you aren't crazy to sell calls. This isn't your last chance to buy oil.
I get 50 small to medium checks a month selling options. I try to not dwell on the 2 or 15 that were a bad idea any given month. You'll drive yourself crazy if you worry about each position too much.