This is how I make passive income trading options on AAL

2 ต.ค. 2023

American Airline currently trading at a steep discount because fear of lower future profitability in the stock. Airline stocks are known for their volatility because almost everything in the economy can affect the stock. The good news is for options trader, high volatility usually mean a high premium we can collect for selling this options.
Sentiment: Bearish
Fundamental: Very bullish base on numbers
Option strategy: covered call
Sell to open oct 6 call strike price 13 @$0.15 limit order

7 ต.ค. 2023

บันทึก

Sell to open oct 6 call strike price 13 @ 0.15 limit order was cancel earlier in the week as price was trending down giving this strike price very little value. I decide to STO oct 6 call strike price 12.5 @0.15 instead. This was base on the sentiment that the stock was going to drop further due to overall stock market drop earlier this week. However, the stock didn't drop and so my Covered Call got assigned and now force to sell the stock for $12.50 x 100 = $1250. The overall cost to own is $1255 after account for all the premium being collect. The over all P&L on this positions is -5. I will likely to sell to open oct 13 put strike price 12.5, I will want stock price to trend down to the $12.50 area for higher put premium.
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