Start with $500 and go from there. Everyone has to start somewhere. Thunder is giving good advice with the covered calls info, imo.
I might get my shares of AMAT called away this week. I sold the 112s (calls) that expire on 8/19. Shares are at $110.38 ($110.18/$110.80). Hit a high of $111.32 on Friday. I sold the 112s for $1.75 on Friday morning and could buy them to close the option position for about $2.42 right now (actually when markets open at 9:30am). But I’ll just go with the market. Either sell my AMAT shares for $1.62 ($112.00 - $110.38) more than the current quote or just rinse and repeat next week if the 112s expire (I might buy to close if they drop below about $0.50).
I’m scanning my accounts for more potential covered calls to sell. CSCO, AMZN, NVDA, AAPL, ISRG, and ORCL are the most likely candidates if markets surge on Monday. I don’t have any put sales on my radar right now since equities rose so much recently. Maybe a leveraged inverse bear ETF like FAZ. But I don’t know if I really want to own FAZ right now. Markets could easily keep going up all the way to the mid-terms and beyond.
I’m brand new at this. It’s actually not as complicated as it seemed. Need to stay focused though. It’s not necessarily extremely complex, but it can be tricky with the 4 possible positions. Bullish: buy calls or sell puts. Bearish outlook: sell calls or buy puts. Unlimited losses: selling naked calls.
What I like is that no matter which way the market moves, I can look for opportunities. I had been just waiting for and looking for pull backs to add shares or looking for shares to sell when market advance. When markets are in the middle of a trading range I was just not paying much attention to the day-to-day noise.
I don’t think I’ll mess with it, but I own shares of SAVE and JetBlue is buying them for $33.50. SAVE is at $24.50 +/-. SAVE shareholders are supposed to receive $2.50 once they approve the deal (which they have). I can’t find anything about when that will be paid - but it seems like it would be for shareholders of record on the date of the vote considering how big the difference is from $24.50 to $33.50. So what I’m not going to fool around with are the SAVE options. I’d kind of like to sell covered calls while waiting. Out of the money would expire worthless. I don’t know how the in the money options will wind down. The math is really weird on SAVE right now. I understand that there is a discount built in in case regulators block the deal, but even if that were to happen it seems like airline stocks are advancing. $33.50 minus $24.50 just seems silly imo.