I am just learning about option trading strategies and haven’t really traded much (except buying some calls) .
lets say i have 1000 shares of XYZ and since the market is consolidating i have a view that it wont go up .So i sell a covered call to reduce the cost . I just want to know how exactly this works while we actually sell the call and let it expire (not squared off) . My query is not just limited to the profit/loss in this trade but also on the taxes (STT)
By the end of expiry it could be that the option expires ITM,ATM or OTM . In each case , do I need to be careful with the position if I am not squaring off ?
Mybe I will get more clarity when I actually trade these strategies . For now I am just trying to get some info on this