Covered Call Example: 12/26/18
With the market selling off, or correcting, there are many bargains.
For Covered Calls, say Jan 18th, check our CHK, AKS, AMD, RIG, OAS. There are more. I'll run some numbers when after I run some errands.
One to show you a trade. Jan 18th, the third Friday Expiration is used here.
RIG is a $6.50. Way down. The $6.50 call options are 54¢ X 58¢. Here goes. To buy 1,000 shares (no reason, but to make the math easy), it would cost $6,500. Now sell the $6.50 calls giving someone the right to buy your stock at $6.50. At the market, you'd take in $540. Tell e where you can get $540 on $6,500 for three weeks.
Whether you sell the stock or not, you get to keep the $540.
Check out the $7 calls. They are less to sell, but you'd make another $500 if called out (sell). They are 35¢ x 37¢. That would be $350 now, and maybe another $500.
Also, if you use margin, you may have to only have $3,250 of your own money at work. I'd probably do the $7s. Oil seem to want to rebound. Check the charts.