LogFAQs > #949094053

Yup. You'd make $160 in that case and have no risk of actually losing your shares by default. You could then sell a call for a bit over a week out (or just tomorrow, though there won't be a lot of time value for that contract) at a higher strike that you again don't expect the stock to reach to get easy money.

The problem is when your stock moons and you don't get to reap or your stock plummets and you no longer profit by selling calls at a profit and you just have to sit on your stock like the old days. But the former case you're still profiting and the latter if you properly valued your stock you should be okay sitting on it for a while. You could also sell calls that would have you selling the stock at a loss with the cost of the contract but I think that's probably the path to losing money with this. You can always wait till the stock goes up and sell your contracts again then. The only reason I'm selling FUBO calls now is I'm using the proceeds to buy more FUBO while it's still down-- if you have no immediate use for the money waiting might be prudent.

Now if you really want to make yourself "moon proof" you could also buy a really long expiry call that's slightly out of the money. For instance I could buy a $30 call on FUBO that expires at EOY with 1000 dollars right now-- I can make that in less than a month of selling calls on the two hundred shares I have. That means if my $28 and $29 weekly FUBO calls get cashed in due to the stock going absolutely nuts, I'll still have 100 shares in my pocket that I can buy at a reasonable price.

And if it doesn't go absolutely nuts, I can always just buy the shares back. No need for a contract if my shares get bought at $29 when the price is $29.25. Just buy the shares back with the $2900 I got form my contract cashing out.

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No problem!
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