Options Trading Tutorial

If I sell a covered call strike price 35, will my shares be called away as soon as the price goes to $35.01?

Or does the price have to go substantially higher? What price would my shares be called away at?

Public Comments

1. Most of the time, shares are not called away until expiration, but there is always the chance the holder of a call will execute it before that, in which case, the chance that your call will be matched to the one being executed will depend on the number of open calls at that strike price for that expiration. But think about it, most people who buy call options will sell the option rather than execute it. So executing early and being called away early doesn't happen very often, but it does happen.
2. The above answer is right on. Also, if the stock pays a dividend and the option is in the money, much more likely to be called early right before stock goes ex-dividend. In all my cover calls I have ever written, the only one called early were a result of the stock going ex-dividend. Obviously this only applied to American style options.