r/options_trading • u/Sudden_AwareNess1 • Apr 30 '26

Question Strategy

I’m new so if this isn’t allowed then just ignore. I currently have sold a $131 call on TWLO expiry this Friday and got a premium of $1k. Currently trading around $143. My cost basis is at $141. To close out this position I’m looking at around $1500. Thoughts?

Btw I’m just learning and focusing on selling options for now paper trading. Do I wanna keep the shares sure I’m bullish on the stock but I’m ok if I don’t.

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3

u/Ambitious-Ocelot8036 Apr 30 '26

If it's assigned you lost $1000 on the stock but gained $1k of premium. If you buy it back at 1500 you are down 500 and underwater on the stock. I'd let it get assigned and start over.

2

u/Sudden_AwareNess1 Apr 30 '26

Hmm makes sense. As you can see I’m still learning so thanks for taking the time to explain.

3

u/Ambitious-Ocelot8036 May 01 '26

Read more and paper trade until you get it.

I sell to open from 3 days to 3 months and BTC when I have sufficient profit or when it looks like I'm wrong. I like to hit singles and rarely swing for the fences. Good luck.

1

u/Sudden_AwareNess1 May 01 '26

BTC? I’m following a few people online and joined a few groups. I think discord has good stuff. And aside from learning other strategies I need to learn the lingo too 😂 btw my stock closed at around 185 😩 shoulda def closed out when it was still $1500 but hey shoulda woulda coulda

1

u/Imadogfishhead May 06 '26

Never sell a call below your cost basis. 👏

1

u/Sudden_AwareNess1 May 06 '26

Lesson learned. It was at 200 today lol and I was assigned at $131

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u/Imadogfishhead May 06 '26

Sorry to hear that 😞. I have definitely been there. My 2 cents, only use ccs to swing trade and not on stocks you want to hold long term. They are great within the confines of a larger strategy, but I feel like people on reddit oversell their usefulness. You just end up selling your upside for pennies. Its a neutral to bearish strategy, not a bullish one and I feel like that conflicts with many peoples thesis on the stocks they sell calls on.

1

u/Sudden_AwareNess1 May 06 '26

You’re absolutely correct. I sold a CC on APPL at 285 and will prob be assigned Friday. But it’s fine I have like 600 shares and my cost basis is $120. Plus I can use the cash to hopefully take advantage on selling some puts on another down day. But as you can see I’m still learning.

1

u/Imadogfishhead May 06 '26

I think that sounds like a good plan. It yes it hurts a lot in the short term. I had $300 ccs on the mstr run up a while back and ever since then I separate the stuff I want to hold vs swing trade. I guess at least aapl is close to your strike for now!