I have a question for experienced options traders. I'm looking at January 2015 Calls on GOOG at a strike price of $1,000. They're currently selling for about $100 per contract. (A little less, but let's round to $100 to make it easy)
Now, I understand the risk of selling uncovered calls, especially for a stock with such a high price. But if I'm understanding this correctly, someone is willing to pay $10,000 for one contract giving them the right to purchase GOOG at $1,000, meaning it would have to nearly double from the current price, ~$520, in only a 3 month window? Am I missing something?
Conversely, TSLA January 2015 Calls at a Strike Price of $400, (about double the current stock price as well), the last trade was .13 with a B/A of .13/.39 So even at the Ask, the cost is about .1% of the underlying stock price, while the cost for the GOOG contract is about 19% of the underlying stock price.
Again, am I missing something? Am I crazy to think I could sell 1 uncovered GOOG call and make $10,000 with a very small risk of the option ever being exercised?