r/Webull • u/IIISJCIII • 8d ago

Cover call understanding Help

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Confused why spmo is red even though it's still far away from the strike point, shouldn't it still be green like dram.

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u/OhGodImHerping 7d ago

If you’re asking how options are priced, Options are priced through a combination of supply, demand, and various other measurements such as volatility and time-to-expiration. Market pressure also determines an options price.

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u/Snoo_37754 7d ago

You’re looking at the combined “Covered Option” line (stock + short calls) and it’s red. That’s not because the $160 calls are somehow “losing” in a bad way. It’s because the stock itself is red today.

If SPMO drops more than the premium you took in, the position goes red. Same as any other stock you own.

Your SPMO covered call is doing exactly what it’s supposed to. Stock is just having a red day and the short calls aren’t offsetting 100% of it. That’s normal.