The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer a question, “Should you wait for a bounce to start selling covered calls?” This is a big one. And the one that I struggle with honestly as well a lot of times is if we get assigned a series of put options and we get basically put the stock and now, we’re long stock, if we decide to hold the stock, the usual trigger for me is to start selling covered calls immediately, but many times, we’ve actually been in a situation where we wait for the stock to have a little bit of a bounce or rally before we start the process of selling covered calls. Now, using covered calls is a great technique to reduce the cost basis on the shares, bring in more credit, ultimately lower your breakeven point to give you an opportunity to take the position off at a profit. And we’ve done a lot of podcast on this process and how we do this on the weekly show, so if you want to go back through the weekly podcast, we ha