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Would you sell a covered call below cost basis if the numbers made sense?
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Author asks whether to sell covered calls below cost basis for higher premium or wait for recovery.
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I’m looking at a position where every call above my cost basis is basically dead premium.
Looking at lower strikes, I could collect more credit, but obviously increase the chance of shares getting called away below my original basis.
- $86 strike → higher premium, but lower return if assigned
- $90 strike → less premium, but better outcome if shares recover/get called away
am I better off maximizing premium and continuing the wheel, or accepting assignment risk to potentially free up capital?
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