You got $11 for calls that only have about $3.00 of intrinsic value? Wow, that is a great deal, I'm really curious what the stock is. It must be extremely volatile. Obviously a lot of other people think it's heading up as well.
As long as the stock stays below $35 by next January, that money is yours to keep. Even if the stock does rise above $35, and you get called, you still have made a great deal, because the stock would have to reach a price of $43 before you would miss any of the gain in share price. So you have limited yourself to roughly a 25% gain. At least that is better than a poke in the eye.
Your risk is if the stock gets called it may change the tax status of your gains on the investment in the stock, or if the stock drops below around $21 the loss in the stock value would wipe out the profit you made selling the calls.
My numbers are all rounded off roughly, so no one needs to pick my math apart. Thanks in advance.
Selling covered calls is a great way to add a little income to long term investments.
I'd still like to know what stock that is.
