this morning i "sold to open" a single OTM call contract for a stock i own lots of. first time doing it. it's showing up in my positions summary as QTY (-1) call option at whatever date and price. i'm equally happy pocketing the premium and holding the stock for a while longer, or selling my stock at the strike. the underlying dropped a bit after i opened the position, and the position went on to lose market value by COB today. i'm wondering a few things.
1 - why would the market value of my position drop? is it because i still hold the underlying, which dropped? or now there are fewer buyers for the call option, driving down the value of what i'm selling?
2 - do i need to care about the MV of this position? are my losses still limited to drops in the underlying / missed profits if the stock were to blow past the strike and i'm forced to sell?