Selling Covered Calls on QT TFSA
Hi Everyone,
It's my first time writing a call in my TFSA when I usually just buy calls/puts and sell them prior to expiry.
Just want to make sure I'm understanding this correctly. I'm an accountant by trade so I understand the principle of calls and puts, but just wanted to know if I'm doing it right on Questrade.
I have 500 stock of company A (priced at $20) in my QT TFSA where I want to collect some premium. The company is on the TSX so there is no covered call option in QT.
I sold 5 call contracts where questrade indicated that I am entering a short position and collected $750 in premiums. Now my questrade has my call contract I sold with -5 in it as quantity.
Since it's at -5, do I have to cover those call contracts before expiry or can I just let it expire if its OTM? Regardless, if the price goes above my strike that I sold my call for, I am happy to sell it at that amount (losing out on potential upside in favour of the premium)
It's my first time writing a call in my TFSA when I usually just buy calls/puts and sell them prior to expiry.
Just want to make sure I'm understanding this correctly. I'm an accountant by trade so I understand the principle of calls and puts, but just wanted to know if I'm doing it right on Questrade.
I have 500 stock of company A (priced at $20) in my QT TFSA where I want to collect some premium. The company is on the TSX so there is no covered call option in QT.
I sold 5 call contracts where questrade indicated that I am entering a short position and collected $750 in premiums. Now my questrade has my call contract I sold with -5 in it as quantity.
Since it's at -5, do I have to cover those call contracts before expiry or can I just let it expire if its OTM? Regardless, if the price goes above my strike that I sold my call for, I am happy to sell it at that amount (losing out on potential upside in favour of the premium)
