Will I “Lose” My Shares?

This is the sixth in my series to help investors navigate and leverage the power of the Fidelity Trader+ application. This week one of our grandsons asked me what I had been doing that morning. I took our daughter and two of our grandsons to lunch at the Verona (Wisconsin) Culver’s, so the question arose during lunch. I told him that I made about $800 in five minutes trading options. Of course, he wanted to know how that is possible, because he certainly doesn’t earn that much in a week of part-time work at the local Hy-Vee.

After I explained the nature of covered CALL options and cash covered PUT options, my daughter rightly questioned the wisdom of letting someone potentially buy my shares. Wouldn’t it be better to keep the shares for the long run? The answer, is “Yes.” In fact, if I own an investment I generally want to keep it for the long-term. So a covered Call contract does expose me to the possibility that my shares will be called away if the share price rises to the contract price.

Call Prevention SECRET

The “secret” is to avoid greed and understand the probability of your shares being called. Thankfully, Fidelity’s Trader+ provides a means to understand that probability. The secret to see the “Probability of Profit” is to click on the Option Chain menu box that says “Multi-select.” That opens a second window that provides some helpful information.

Multi-select Probability of Profit

In this video I step through the key features of the Multi-select window. I discuss the net credit, break-even, maximum profit, maximum “loss” and the probability of profit from the options trade. One important statement in the video is my personal choice for the “probability of profit.” My goal is to avoid contracts where the probability falls below 70%. In other words, I only want a 30% probability (or less) that my shares will be called away. As I mentioned to our daughter, this works well for me. Very few of our shares have been called away YTD 2026.

If you want to watch the series, here is a link to all of my YouTube videos: Wayne Winquist YouTube

Is It Worth It?

My YTD income from trading covered call and cash covered put options contracts now stands at $115,849. Given the fact that each trade takes less than five minutes, that kind of additional income is welcome. If we add our YTD dividend income of $114,948, our total YTD 2026 income is over $230K. I guarantee you that I never earned an annual salary that high during my 45 working years (1969-2014).

Only you can decide if you want to “risk” trading options. I believe the word “risk” is a bit strong given the reality that most contracts I sell do not result in my shares being called away. However, for those of you who have a love affair with your investments, then options trading is not for you.

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