Options sound complicated. They're not — once someone explains them without the jargon.
When you sell a covered call, you're on the receiving end of something most options traders spend their careers fighting against: time decay. The Greek letter that measures it is theta. And once you understand what theta means in actual dollars per day, the whole premise of covered call selling b...
The BasicsMost investing requires something to happen. Prices rise, dividends get paid, earnings beat estimates. Covered call sellers have a different relationship with time: they collect money when nothing happens at all. Every day that ticks by, the option they sold loses a little more value — and that e...
If you've ever watched a covered call position in its final two weeks before expiration, you've probably noticed the option losing value faster than it did in the first two weeks — even when the stock barely moved. That acceleration is theta doing exactly what the math says it should do. Understa...