I am writing covered calls on Interactive Brokers, usually with around a month to expiration and 5% ITM.
In short, I profit from the time value.
Example:
Lets say stock X is at 100, I write a Covered call with strike 95 and, lets say, sell the option for 7. Total profit if called is 2 /93 = around 2%.
If the stock at exp is above 95, stocks get called away and I realize profit.
But somehow, I did not manage to find out where to best display this on IB with the reporting function.
I am also not sure if the Portfolio Performance Tool from IB is reporting the overall performance correctly with complex positions.
Does anyone know if there is a reporting function that directly displays the profits from a buy write transaction for each stock and the option that was sold with it in the same table?
This would help me a lot with this years tax declaration
IB is really strange with options and what’s available on different systems, how it’s reported etc. I’ve found it best to just keep track of my option trades in a spreadsheet. Maybe there’s a custom report you could create?
Depends a lot on the implied volatility. I’m mostly interested in upwards trending stocks so I’d write the call slightly OTM. Selling ITM calls might be acceptable in a bearish situation.
This might be a bit off-topic, but since this discussion is already about selling covered calls on IBKR:
I am new to options trading and would like to start practicing what I have read and learned. I want to sell covered calls (ABBN) on IBKR. However, there is something I don’t understand about the interface when it comes to choosing the expiry time.
In the following pictures, you can see that the option for 6 days appears twice on the list. The first is labeled “Dec20’24,” and the second is “Dec20’24(ABBN).”
What is the difference between them? They seem to trade at different prices.
ABBN is the American-style option that can be exercised any day before the expiration date, the other is the European-style option that can be exercised only on the expiration date; this can be seen in the details about the contract (in TWS).
Of course you can always close your position yourself before expiration, provided there is liquidity and a counter-party for the trade.
Prices are often very different when there is a dividend distribution before expiration, marginally different if there is no dividend in-between. American-style options are generally more liquid than European-style ones.
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