Hello people… I have been trading Forex for Long time quite quite good there… However I recently started learning about Options …since its so much versatile and so many things could be done with this…
I learned about covered calls and cash secured Put Options… It Interests me since its too simple and much secured. As I said I’m very new to options …still learning ABC of it and never traded Live…Indeed I need to make one thing clear…
i) well in secured put option when price comes to my strike price I have to take underlying stock delivery… and then generally the method is to start selling covered calls …and as its said rorate the Option wheel
my concern is when I do take delivery of that stock …do I need to hold it ? why simply I cannot sell it right there maybe a point up or down and get off with my money… why do I need to get to that covered call phase… I can simply sell my stock …get my cash and repeat this secured Put again… why do I get to those selling Calls.
… another thing…In case of strike price hits ( in secured Puts) what Losses I make if any… I belive I keep the premium… and then I have to take delivery of underlying stock at given Rate… is there any other Loss I’m making there… please clearify.
I belive I will hear from someone kind enough to explain me… my Regards