# Does anyone trade covered calls? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [June 22, 2010, 1:57am UTC](https://boards.straightdope.com/t/does-anyone-trade-covered-calls/544081 "2010-06-22T01:57:37Z")\ **Posts on this page:** 7\ **Page:** 1
**Author:** ![LS04](https://avatars.discourse-cdn.com/v4/letter/l/9de0a6/32.png) [@LS04](https://boards.straightdope.com/u/LS04)\ **Post date:** [June 22, 2010, 1:57am UTC](https://boards.straightdope.com/t/does-anyone-trade-covered-calls/544081/1 "2010-06-22T01:57:37Z")
Ive been trading calls for about a year now on three companys oil/gas and its amazing how you can drive your cost basis down doing this. Im quite interested if anybody has had luck doing this also. I guess Im going to get torched because a lot of pepole dont understand the options market. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [June 22, 2010, 6:00am UTC](https://boards.straightdope.com/t/does-anyone-trade-covered-calls/544081/2 "2010-06-22T06:00:05Z")
Yes, you can drive your costs down, but you can also drive them up. Like any other sort of financial trading, it’s a gamble, and if you don’t realize that, then you’re in for a shock when your luck changes. Did you have some factual question about these sorts of trades? ---
**Author:** ![Colibri](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/colibri/32/1841_2.png) [@Colibri](https://boards.straightdope.com/u/Colibri)\ **Post date:** [June 22, 2010, 1:51pm UTC](https://boards.straightdope.com/t/does-anyone-trade-covered-calls/544081/3 "2010-06-22T13:51:20Z")
Since the OP is looking for advice, this is better suited to IMHO than GQ. Colibri General Questions Moderator ---
**Author:** ![smithsb](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/smithsb/32/12107_2.png) [@smithsb](https://boards.straightdope.com/u/smithsb)\ **Post date:** [June 22, 2010, 6:17pm UTC](https://boards.straightdope.com/t/does-anyone-trade-covered-calls/544081/4 "2010-06-22T18:17:24Z")
I’ve been successful over the years but not in all situations. Works best is a slowly rising or stagnent market. The current (I would call extreme) volatility is not a good time IMHO. External events like BP’s spill, Korean ship sinking, Greece/Portugal/Italy finance problems, political turmoil in the US are all having a disturbing effect on markets, industries, and forecasting. Markets and individual stocks are not responding to traditional measures (boring accounting stuff). Events and circumstances way beyond their control or relevence are impacting the stock prices. It’s no excuse for not doing you homework on a stock. Research, research, research. If you don’t want to consider owning the stock, a good premium is not a good reason for entering into the trades. You may end up with the stock for some longer period of time. I look at dividend yields and timing when considering a stock as well since I may own it for an extended period. There are a number of covered call dedicated web sites. Warnings about stock touting should be heeded. Those “limited time special offers” for inside information should be avoided. ---
**Author:** ![LS04](https://avatars.discourse-cdn.com/v4/letter/l/9de0a6/32.png) [@LS04](https://boards.straightdope.com/u/LS04)\ **Post date:** [June 22, 2010, 11:04pm UTC](https://boards.straightdope.com/t/does-anyone-trade-covered-calls/544081/5 "2010-06-22T23:04:18Z")
This was the first time I sold to open and bought to close. Usally just sell to open and hope I dont get assigned. Today was a good day to buy the calls back, Will be looking to sell the calls again tomorow. ---
**Author:** ![dalej42](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@dalej42](https://boards.straightdope.com/u/dalej42)\ **Post date:** [June 23, 2010, 4:35am UTC](https://boards.straightdope.com/t/does-anyone-trade-covered-calls/544081/6 "2010-06-23T04:35:35Z")
What delta do you usually sell? Ideally, you should sell a delta of around 30. You capture maximum premium there by selling with 30-90 days until expiration. ---
**Author:** ![LS04](https://avatars.discourse-cdn.com/v4/letter/l/9de0a6/32.png) [@LS04](https://boards.straightdope.com/u/LS04)\ **Post date:** [June 23, 2010, 11:29pm UTC](https://boards.straightdope.com/t/does-anyone-trade-covered-calls/544081/7 "2010-06-23T23:29:22Z")
Ive never gone out past 60 days. Today I closed out 2 positions {July calls) that I opend on Monday. Im not that famillar with the Greeks so I dont know how to calculate the delta.