Covered Calls Definition
Options question from noob…?
Hi all here is some background. After writing a covered call on a stock I recieved a premium, that shows on my history immediately .After it expired worthless, they removed the option. Makes sense! Soon after (7 days) I recieved a “rebate”, and according to Ameritrades definition it is”In an options transaction, the amount paid to the holder of the option if the option expires worthless” Im not sure, but do I get paid twice. Please explain, my account fluctautes $100′s sometimes $1000′s so it is hard for me to keep track. especially with the liability of writing a call going against your account, and screwing with the balance!
It looks like the option expired out of the money and in which case the writer here you pockets the premium. Then it might be that the brokers played with margine and made some money and gave you a portion of their earnings as a rebate.
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