Trade Idea:test125

Here's a Trade Idea for 2023-12-05 Create a Covered Call on test125 with a 5 strike price. To Reduce Risk: Buy the call at 25% loss A Covered Call on test125 means that we own the stock and we sell an option to another investor. The strike price is the price at which the investor can buy the stock from us. In this case, the strike price is 5 which means the investor has the right to buy the stock from us for $5 per share. By selling the option, we earn a premium which is income for us. If the stock price stays below the strike price, the option expires worthless, and we keep the premium. If the stock price goes above the strike price, the investor may exercise the option and buy the stock from us at $5 per share. In this case, we realize a profit of the premium plus the difference between the stock price and the strike price. To reduce risk, we suggest buying the call at a 25% loss. This means that if the stock price goes up and we start to lose money on the call option, we will exit the trade by buying back the option if our loss reaches 25% of the premium we sold. Overall, this trade idea can help us make income by selling the option premium while owning the stock. If the stock price stays below the strike price, we keep the premium. If the stock price goes up, we may realize a profit if the investor exercises the option. By having a risk management plan to exit the trade if the loss reaches 25%, we can limit our potential losses. This is not investment advice. We encourage you to seek the advice of a competent professional.