Selling Call Options Basics + Robinhood Demo in 10mins (Beginner-friendly)

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This video is tailor-made for beginners to explain SELLING CALL OPTIONS (with Robinhood Demos), all in 10 mins. If you just started option trading, this would be the best video to go for. I will walk through what it is, how it works, and give you a demo on both good and bad scenarios, without confusing graphs and maths.
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If you're interested in more option trading tutorials, here are the rest:
► Buy Call: • Buying Call Options Ba...
► Buy Put: • Buying Put Options Bas...
► Sell Call: • Selling Call Options B...
► Sell Put: • Selling Put Options Ba...
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Questions? Drop a comment! Cheers mate!
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Just a practical guide.
Music: Joakim Karud / joakimkarud
#optiontrading #sellcall #robinhood

[@Justeen15]

Selling call options is not that complicated overall, isn' it? ;) Let me know what your thoughts are!

[@Razerkid99_]

By far the best explanation

[@Justeen15]

Thank you! Let me know if you have any questions!

[@andrewsorrentino2355]

Thank you!

[@Justeen15]

Thanks Andrew! Hope this is useful! Let me know if you need more clarifications or if there are other topics you want to see in future videos!

[@cesarpolanco9024]

Excellent explanation!! I would like you to do a video about ways to increase my funds quickly. I have money sitting in a bank account and would like other ways besides trading options

[@Justeen15]

Ha that’s an interesting one. Let me see what video I can create for that!

[@chiewtiong]

Need to have share first?

[@Justeen15]

- Most of the time, yes you need to have at least 100 shares of that stock first, before you can sell a call on that stock. This is called a covered call. You call is "covered" by the shares you have. - I said most of the time because there is another case call "uncovered call", which means you don't need to have 100 shares to sell a call, but you need to get your option trading level approved by your broker as this is a very risky thing to do. Most people don't enter this territory so I don't bother include it in the video. But now you know haha!

[@XC777]

What happens if nobody wants to buy the contract I'm selling?

[@Justeen15]

If you look at the bid & ask, and if someone is bidding, that means someone is looking to buy a call. Most of the time you should be able to sell. There should always be someone buying from the market. If no one wants to buy, then of course there is no one you can sell the call to. I can think of a few possibilities that no one wants to buy: 1. the stock is itself has very low trading volume 2. the option of a stock has very low trading volume 3. it's getting very close to expiration date 4. the strike price of the contract is very out of the money (it's so far fetched that no one think it's worth gambling anymore) Does that make sense? Any follow-up questions or comments? :)

[@XC777]

@@Justeen15 yes that makes sense. Quick follow up question. Is the “bid” price the price I have to sell my contract or can I sell it for higher. For example: if the bid price is $90 but i want more for the contract could I sell it for $100? Or would I have to wait until the stock price rises more?

[@Justeen15]

@@XC777 Yes absolute, that's when you set a limit sell of $100 and wait. If someone is willing to pay that then sure it will get executed. Generally speaking, the option price has a lot to do with the movement of the stock price, so you can set $100 and submit. If the stock price rises, then the call price will hit $100 pretty quickly and then boom! You just sold it! Or of course, you can wait to see where the stock goes and then sell it, cuz maybe 10 mins later the bid already goes to $120. Price can move fast.

[@DavidRodriguez-sh3jy]

Can you do the same thing, but with Charles Schwab?

[@Justeen15]

Hi David, thanks for the comment. Unfortunately I don't have Charles Schwab. Were you looking for something in particular? Like a walkthrough of the option trading UI on Charles Schwab? Or what buttons to click on exactly to sell call?

[@DavidRodriguez-sh3jy]

I just can't seem to get all these "options" stuff. Can I send you an email?

[@Justeen15]

@@DavidRodriguez-sh3jy sure, you can find my email under the about tab in my channel page!

[@demetriusgreen3670]

I still don’t get it

[@Justeen15]

Which part do you have question on?

[@Justeen15]

Selling calls is essentially you have 100 shares of something, and you can sell a call to others. By doing so they will pay you some money. If at expiration, the underlying stock price is lower than the strike price you sell the call at. You win, and you profit that entire amount of money from the buyer.

[@voty7345]

I have sold ten contracts of amc sell call at the strike price of 50 by expired 10/15/21 . And the premium i received was 550 but it shows as negetive 550. So as long as the strike price doesn’t go to $50 by the expired date. I won’t have to buy back the ten sell call contracts right? And the negative 550 will be positive 550?

[@Justeen15]

@@voty7345 Let me see, so you sold 10 AMC call at 50 strike (which means you should have 10 x 100 = 1000 shares of AMC stocks to begin with) Is that correct? 1. Since you are selling calls, you should receive premium, so the $550 should be your premium, and it shouldn't be negative? Check your trade history and account value to see how the amount changes after you sell those 10 calls. One thing I can think of is you don't have 1000 shares of AMC stocks, which mean you are selling uncovered calls, which might be different than what I talked about in the video (the video is about COVERED calls, you have the shares to begin with). I am not sure yet. It should show -10 (negative 10) in your account indicating you SOLD 10 calls, that should be negative. 2. As long as the AMC stock price does not go above your $50 call strike price, you are good. You don't have to buy the call back, or shouldn't need to sell your 1000 shares of AMC stocks (because the buyers of the 10 AMC calls shouldn't exercise the call contracts). Did I answer your question? Let me know if I need to clarify more.

[@voty7345]

@@Justeen15 : I took a photo of my sell calls to show to you but I don’t think I can post the photo here . Thanks!!!