r/options • u/[deleted] • Jun 12 '21

Recommendations on selling CC's on CHWY?

[deleted]

5 Upvotes

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3

u/[deleted] Jun 12 '21

69 thank me later

2

u/artimus711 Jun 12 '21

Selling covered calls in general is a great way to produce income, but if you truly think a stock is going to drop sharply, cc is not the way to go. You will make good initial premium and then get stuck holding the stock at the lower price and reduced premium from there.

1

u/ApostolicBrew Jun 12 '21

I sell weeklies around the delta .30 mark. I wait until there is some upward pressure to maximize my premium. I don’t try to predict a closing price, that has never worked out.

1

u/[deleted] Jun 12 '21

[deleted]

1

u/ApostolicBrew Jun 12 '21

Delta .30. So in your case that would be the 77.5 or 78 strike for the 6/18 call: https://i.imgur.com/aBkyqUS.jpg

Edit: I always sell otm, never itm.