My guess is most people sell calls because they have little faith that AAL is going to take off anytime soon. Its also a good way to make money. I keep a core position and buy more stock on significant dips of several $$$. Bought more at $32, waited for some recovery and then sold Jul $35 calls for $1.70, which expired worthless. Then sold Aug $35 calls for .79. My shares were called away after the close. So I received $2.49 per share total on my calls, and still got to keep the $3 appreciation from my buy price. Not a bad strategy because there is a good chance AAL trades in a range rather than soaring into the $40's. But that's OK too, because if it hits $40 I'll sell calls against my core position. I admit part of this is patience. When a stock appreciates, I like to make money on that move--not just feel annoyed when once again the stock pulls back. When I can make over 10% in a couple months I'm very happy with it.
I like the headline on the AAL page that reports Imperial has a $90 price target. But I would also be very glad to see $40.
Love it when that happens. Yesterday Goldman said there are better internet security plays than CYBR, and after a brief morning swoon, the stock is up nearly 5% for the day. Hopefully AAL keeps climbing.
Uncle--The account is a normal retirement account. No margin allowed. Only options allowed are covered calls, a very conservative approach. Like building in a higher dividend. Works very well for me.
uncle--This volatility is why I sell covered calls. That and the fact that my accounts are retirement accounts that I don't have to pay taxes on until I begin taking funds out. Sold some Jul 29 $35.50 for $1.50 against my low $30s shares because when we have a strong move higher, I want to make sure I come away with something. Hopefully earnings and guidance will be good and we will keep moving higher.
On a separate note, if Yahoo removes this board, I have left a post on Investor Village message board for all AAL posters. Their board has all posts numbered (like Yahoo did two message boards ago), groups messages by heading for discussions, has a place to rec posts so those in a hurry can just read the highly recommended posts, and even has a private message feature that allows you to message an individual on the board privately. It is far superior even to this format.
I feel your pain re patience. I bought a few AAL Jul15 $29.50 calls after the Brexit dip for .50, then was very happy to see the big rally at the end of last week, and, doubting it would continue sold the calls for a buck. Could have sold them for $5 this morning had I held. Ouch. But on Friday, with the calls expiring this week I thought I was being wise.
Was going to joke earlier that I must be on the wrong board since my stock does not go up this much, not realizing it really never does go up this much--ever. And then decided to check posts and could not find the board. Had to go to history to find the message board. Are others having this same problem with redesigned Yahoo Finance and no access to message boards?
Was the downgrade the last piece of bad news that caused traders to say all the bad news is in now? Or created as an opportunity for shorts to cover? Whatever the reason, it is a welcome relief to see the stock moving higher. Will the groundhog see its shadow tomorrow and run back into its hole? Hopefully not.
A little late to the party to downgrade now. How about we downgrade Credit Suisse, now down from $30 to $10? I'm not normally a conspiracy person, but this timing really seems suspicious and gives the shorts a great gift. Hmm, is it possible in a situation where there is a great deal of money to be made there could be manipulation? Oh wait, that's the pool we're playing in.
I'm long and underwater on shares recently bought at $30, as well as a few bought higher. Below I am listing the effect of the shares buyback so far:
As it turns out, your prediction was well timed. The stock could have been picked up the next day for $25 and now, a few days later, is up almost 20%. I'm with you on other comments re bots. Now that they have made the stock unattractive through all kinds of "news" stories and beaten it down to the mid $20s, someone has been picking it up for a song. Also agree with Uncle's comments about some short covering taking place.