I've noticed something odd about CPE options. I've been buying CPE stock recently in the low to mid .40's and was able to sell Jan/2022 $1 calls for .45 - .50 when the stock price rises to the .55 range. My last such trade, I purchased stock at .44. The next day, CPE went to .53 and I was able to sell the $1 calls for .45. This makes absolutely no sense to me and I'm hoping someone here can explain. Who in their right mind would pay .45 for a call option when they can just buy the stock for .53? I don't know if this is some kind of anomaly, but so far, I've accumulated thousands of shares at literally 0 cost. The only downside is that profits are capped at $1 What am I missing here? I hope someone here can make sense of this for me.
The downside is also that the stock goes to 10c. Implied volatility is out the roof, making options very pricey, great for selling and collecting premiums.
Even at 10c, my cost is 0. I'm only buying a few hundred shares at a time and not buying more until I can sell $1 calls to recoup my entire cost plus commission. A mistake would be to buy large quantities, and then have the stock plummet before being able to sell the calls. I understand that options in general are expensive right now but I haven't been able to find another example of anything so skewed as CPE.
