I'd retiring or working less in 8 years, and considering this financial recession, Im deciding to begin taking up skilled trades. I'm curious to know best how people split their pay, how much of it goes into savings, spendings or investments, I earn around $120K per year but nothing to show for it yet.
You should contribute to your retirement diligently, or better still look into financial planning don't come to youtube for advise, consult a Local or trusted online advisor
Very true, I find myself lucky enough exposed to money management at an early age. Worked full time when I was 19, purchased first home at 28 fact forward timo I'm 57 now not laid off
Recently, I've been considering the possibility of speaking with consultants. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
You're not doing anything wrong; the problem is that you don't have the knowledge needed to succeed in a challenging market. Only highly qualified professionals who had to experience the 2008 financial crisis could hope to earn a high salary in these challenging conditions.
Am 58 retiring next year but the thought of retirement gives me weakness. My apologies to everyone who have retired and filing social security during this time after putting in all those years of work just to lose everything to a problem you never imagined to happen. It’s so difficult for people who are retired and have no savings or loved ones to fall back on.
True, It has never been easier to understand how to build your money after retirement than it is right now with the inflation, when you may study and experience a completely variegated market passively by employing a successful portfolio-advisor. The impacts of the U.S. dollar's gain or fall on investments, in my opinion, are complex.
Guys this is just an example using one sticker only. You can run 10 different ETF/stocks of say 40k and diversify the wheel. It can be way more lucrative than what he presented
And to put beginners into considerations prop firms also profits from them. That’s why I’m impressed seeing people’s validations on theresa option system. nothing has come close to the sheer clarity, depth, and precision of her insights
He is so dangerous. He's killing ppl. It's not only capping the upside with unlimited downside. It's losing on the upside. If you're stocks go up 10% and you're capped at 5% then not only you lose those 5% But then when you go to buy back, you're buying less shares and therefore less covered calls in the next cycle and less income He should be sued and reported to ftc or whoever
Great job. Loving the slightly longer format and detail you are putting into the videos lately. Sharing them with my parents as they are in exactly this situation.
This strategy assumes you won't need to sell your shares. Yet, if the stock price surpasses the option's strike price, requiring you to sell, repurchasing stocks to continue might cost more, cutting into profits despite the premium. Hence, opting for same-day expiry (0DTE) options is key to maintaining viability without significant setbacks
@@justsnappy Initially, the strategy in this video overlooks this aspect. Similarly, cash-secured puts face these issues too. Since market timing is elusive, risk mitigation is essential through using same-day expiry (0DTE) options
I usually sell Cash Secured put options, in addition to the put premium, I received about 5% on the secured cash in my M.M. fund. If the security falls below the strike I usually just roll it forward.
In my 50s, I'm focused on investments for retirement. I've heard of people generating substantial passive income, like someone who earned $650K in under a year on a podcast. What's the strategy for such returns?
Find quality stocks that have long term potential, and ride with those stocks. I have found it takes someone who is very familiar with the market to make such good picks.
My financial advisor has been a game-changer, providing clarity and boosting my confidence in navigating finance. With their help, I've achieved my goals faster than I imagined. Highly recommend!
I just buy covered call ETFs available in Canada/USA and let the managers do the work! My current portfolio of $300,000 has a YOC just over 16% and started generating $4000 a month last month.
@@tonyd3010 I live in Canada so you might not have access to these. BANK, BKCL, CNCL, DFN, DGS, LBS, SBC, FTN, ENCL, HYLD, HDIF, QQCL, USCL, YTSL, BNS, TD, HMAX, UMAX, but I also have US listed SVOL, CLM, CRF, AMZY, CONY, OARK, NVDY, YMAX, SPYI, KLIP, ULTY, TSLY.
I keep a low delta with spy and a higher delta on single stocks with a strike price above basis. If I really like the stock and it tanks where i cant sell calls I buy a high delta put to lower cost basis. If my weight is now off balance I sell a call on extra shares at high delta at cost basis.
Thank you for explaining this. This is why I like covered call ETFs. I give up some of the profit, but I can get a 30-130% dividend from a stock I bought for $30 instead of having to put up $52k of my own money for 1 contract.
Hey Joe! I really like your video BUT.... I wished you had gone over other scenarios that are likely to happen when doing this strategy. Mainly, what happens when your option is exercised and you have to sell shares? Obviously you don't have those shares next week/month to use in your covered calls UNLESS you buy them back. There are a few unknown variables here but if the stock price climbs very high you can't cover the spread to buy back those shares. It would be great if you were a little more thorough here. Thank you, Charlie.
Really enjoying the longer content recently, especially when it comes to option related videos. Currently building toward 100 shares of IWM and SPY in my taxable and Roth IRA respectively to begin selling covered calls, keep up the great work!
You are the first youtuber who helped me understand the basics of the covered call strategy. You make sense to me...Thank you. Would love for you to develop a Live weekly course. I would gladly pay as your knowledge is invaluable and will like get me to finally pull the trigger on implementing this strategy.😂
What about if the covered call option is exercised? Then what? Buy back the 100 shares at a higher price and start selling covered calls on it again? Wouldn't that kill all profits and put you in the negative? And isn't selling contracts at such a high delta mean it's a lot more likely to get exercised?
Great video Joe! I'm only using about 9% of my retirement portfolio to utilize the 7-14 DTE options premium income strategy. I'm up 9.4% in the first three months (that averages out to 37.6% for the full year) of 2024 using cash secured puts and covered calls on a few different ETF's. I take those premiums and buy high dividend closed end funds along with some high div ETFs. Yes, I am creating multiple taxable events, but I'm prepared to manage the tax implications.
Wow. I'm a bit perplexed seeing her been mentioned here also Didn't know she has been good to so many people too this is wonderful, I'm in my fifth trade with her
Her technical analysis are great, her interpretation/projections of the market is so accurate Stacey is one of the best trader i know to follow for advise and daily signals and you won't regret it.
I was trading fairly a small account and I got over 200% within one month. We need more traders like her in the space to guide the teeming population of crypto enthusiasts and traders out there
These profits are true only if the ETF goes up on every contract. It does limit your losses when the ETF goes down but can also limit your profit if it goes above the strike price. These contracts also limit you to less favorable taxes as these are tax at regular income. If your retired on a set limited income, this may not impact you as greatly, based on what tax bracket you fall in. Another account is the fees by doing this weren't figured in either which isn't much.
Hi, in the example that starts at 2:30, the put option sells for $300. That's $3/share. The strike price is $517. Why doesn't the opportunity cost start at $517+$3, $520. If the stock reaches $519 and you're assigned, there isn't any opportunity cost. You actually made more money than holding the stock.
Hi - have you made that video yet where you explain how you would handle a down trending market when your main strategy is selling covered calls on one or more of the indexes? Looking forward to your thoughts. Thank you.
This just seems so risky to me. What happens when you are forced to sell your whole portfolio (the 7 contracts)... The premium wouldn't even cover your capital gains tax you'd owe! So then you're buying back into the market with less and at a higher price. And then, if you continue the strategy and are forced to sell again, you're potentially paying short term capital gains which again will eat your premiums for the month and even more of your portfolio.
Remember there’s no free lunch. You will pay taxes on the gains (shares called away) and you will pay taxes on the short term capital gains distributions (premium). Options aren’t all what it’s cracked up to be in my opinion and I’ve been doing options for about 15 years. The tax drag is annoying and when you need to enter the wheel again and sell a cash secured put and are forced to buy the shares at the strike and the market keeps falling and falling well now your stuck with your shares that you can’t write options with unless you want to write at a strict lower then your cost basis.
If the market crashes and you are all in index contracts your capital to make the income back is going to be diminished. You could say well a crash will kill anything and there is truth to that but this strategy seems especially susceptible to that especially if this is all their capital and only source of income. I could see this being a good strategy for a part of a portfolio but definitely not all. In a non crash scenario what happens when the market goes up a lot? So if you get called and your upside plus premium paid doesn't cover what it takes to buy the same amount of contracts? Also curious how quick the income could shrink in a bear market and how that affects premiums. It would be more helpful to see how this process works over time in terms of drawing income every month through different types of market cycles for me to view it as a case study of success. I'm not saying it doesn't work over time. I have no idea. But would need to see a lot more. I thinks its important you are more forward with the risks to people though and I didn't see that mentioned at all.
Suppose I'm selling 10 contracts and I get called away and the price leaves without me. We'll next month I can only afford to sell 9 or worse 8 options. How does that affect me?
Thanks for the video, and thanks for even announcing at the end a next video how to react on the downside risk of the strike. I consider this the core risk. If the market price falls strongly after you bought 700 pieces of the SPY... How can this stategy be implemented on a sustainable long term way? If there is no way, you can just sell one time weekly options, or one time monthly options, and after a long time falling price of SPY it could become impossible to resell Covered Calls at the money or out of the money. A difficult situation when depending on that covered call income... Is there even any solution? Look forward to the next video then... Shouldn't Covered Call ETFs work better with a more consistant yield should this strategy work out sustainably? To the other end of maybe lost gaines in an upside market: do you roll these kind of covered calls before getting assigned? Or just buy back the parts of SPY at higher prices? or sell puts to get them back?
@@Wikidpalm Thanx. Do not expect free lunch, even if this does rather exist in the US than for a German tax payer... So i hope i will just learn something more here. As some solutions, as selling Calls slightly in the money are tax horror in Germany, so i hope there will be another idea to learn for me...
Thank you for your dedication. As you say, the market sometimes will go down, of course. But sometimes, you can execute the 30 days strategy many times in the same month due an early assingment, and the returns will be much higher than your initial calculations 😮
Furthermore, in the example of te SPY I think you have not taken into account the appreciation of the ETF. For example, if we were able to execute the monthly strategy twice a month, selling 7 Call options above the current price, say at 5 USD above (reasonable). And those two times we were assigned, we can conclude that we will earn good money too. 700Etf x 5usd x2 (times/month)
Let's say you're assigned on your put. You sell a covered call, but the next time the stock goes down further. Do you keep your covered call at the same strike price, or do you target the same delta? It seems like if this happens multiple times you could actually be losing more than your call premium is bring in .
While it's not "Income", don't forget the increased value of the SPY shares from $513 to $518 if you hit a "worst case" positive situation and the shares are called away from you. That's another $3,500 in gains. ($5 per share x 700 shares). - Cheers
Am I missing something here? You sell an option, the strike price is reached, so in the end you have the money from the option contract and the money from the sale of the stocks at the strike price. If the price of the stock went considerably above the strike price, then you have reduced the amount of shares you can then buy afterwards since the money you have from the sale, not including the money from the option contract which you're using to live off of, by definition can't buy the same amount of stocks you had prior to this scheme.
Love the wheel strategy. Why not try to just retire on dividends? I don't want to do the 4% distribution rule. I want that bad boy to keep growing. Pass that on to my kids. Let them roll it over into a Roth IRA or a taxable account and have a secondary income while it continues to grow.
Thank you for the great information always. I have a question, please. What do you mean by 1 on 1 with Joe in the $90 per month tier. Do you mean the Zoom meeting will be 2 people only ( you and I) so I can show you my brokerage account, and you will help me with my questions and set up a correct investment strategy???? Thank you once again.
I kind of follow, but what is the downside? For your first example you had it where you could do 7 contracts, what if they hit the and you have to sell everything. Wouldn't the majority of your premium payments get wiped out by capital gains taxes and having to buy all the ETFs again?
The downside is, you have capped upside meaning if the market has huge gains, you miss out. Also, you are correct. If you want to continually run covered calls, you have to by back in at a higher price every time your call is exercised, meaning your capital will erode over time. There are etfs out there that run covered call strategies, and they do provide great cash flow, but the value goes down over time. This strategy is okay if you need cash now, but terrible for long term growth.
Why in the world would you completely eliminate your potential for capital appreciation by selling ATM CC? These ATM strategies that hard cap your upside are terrible.
Thanks for the great content! I got started late saving for retirement so I will be retiring with less than $1M. I will be using dividends and options trading to produce income for my retirement.
I started with options in 2020 and have been tracking my progress since. I have been made some mistakes, but I am learning along the way. I am refining my system so I should have a system down when I plan to retire in about 6.5 years.@@ralphpal
As always, and enjoyable and informative video. Thanks! There's definitely a risk to the underlying security if there's a prolonged market downturn, though one might be able to mitigate a bit by using some of the covered call income to dollar cost average downward -- but in fairness, I haven't done the math on this. Another possible mitigation and less commitment of capital is to write poor man's covered calls and invest the remainder of a smaller portfolio in something more stable as a hedge. As before, though, I haven't done the math on this, either, to know how much havoc a long-term downturn would wreak on the LEAP.
I cannot wait for the next video because everything presented here ends in pain during the next prolonged market downturn. When that happens your capital base is smaller and you won't be able to generate as much premium on a % basis. An awful 1-2 punch if this is your entire income. Good luck.
Great Video: Question are those bid and ask prices unique to Fidelity? Are bid and ask prices the same or different from broker to broker? I assume these are American style so the very next day SPYD went up from $513 to $518 or about 1% and your shares would have been assigned away. you pocket the 1% capital appreciation and the premium of $300 or about 0.6%... then you sell a cash covered Putt? But you would need to wait a few days for the premium % and the cash from the sale/assignment of your shares to hit your account so there are a few days where you can't write an option??? Also: What are the fees for selling contracts and fees if you get assigned, I notice you don't factor those in??? Why is that???
I'm retied and interested in utilizing these strategies to reduce the erosion of capital in my Roth IRA, so I'm looking forward to the follow up video(s). My question relate to previous videos where you talk about rolling an option. To be honest I don't understand what this entails or when you would do this and what are the consequences, Could you explain when you'd need to do this, Better yet, how about a video explaining this in detail using these strategies?
Rolling a position is simply put closing out (buying back) your current short call (the one you sold) as you approach the time it expires and then you sell a new one at a later expiration date. This can be done is a single order called a vertical debit spread BUT it is entirely unnecessary to roll in one order. Although its quite easy, you will get the same result by simply closing (buying) back the options you sold which closes that trade. Then turn right around and sell new options at a further dated expiration. Some people might try to put up the argument that you save commissions or save money on the bid-ask spread by rolling in one order but in reality you don't. Most option trades take place at the 'mid' price anyway whether it's single options or combination spread trades. Since this is possibly all new to you it would be simpler to just close the first position and open a new position.
@@J123Gthe only reason I can think it might be necessary to roll over closing one and open another would be if there isn’t enough cash to cover the current short in the account. If most cash is withdrawn to live on or reinvested, this could be the case.
Um...how is this a version of the wheel strategy when there are no puts being sold in order to get into the position? Just because there is part of the wheel strategy used doesn't mean that this is a version of the wheel. This has zero to do with the wheel strategy.
@@mjs28s It is the wheel strategy. You can do the wheel strategy with puts or covered calls. Also, eventually, when your puts are put to you you will be long and have to sell covered calls. There is little to no difference in financial outcome. Thus, it is the wheel strategy.
Hi Joe thank you for your videos, wonder if you can do a video for someone like myself who is 68 , has 100 k , lives in Bali indonesia and would like to generate at least 3-5k a month income and also keep capitol appreciation and some growth, but options seem too difficult ,im just learning investing, these Ymax seem too risky as you pointed out, im Im totaly out of my depth in the financial world but learning the best i can, would love to have sustainable monthly income with My Fathers Legacy he has so.lovingly and generously. given, He would have wanted this im sure also, His son never learned finance.:) maybe a few suggestions, or i may have missed another of your informative videos that covered this topic? thank you for your kind help,. Peter
if the market tanks 15% within 60 days for example you need a long time just to recover the loss, that's what you ignore. This strategy only works in a bull market or a sideway market.
This strategy works if you're ok with a paper loss for a few months or years. You need to make sure that there is some upside for each call you sell, this will allow your investment to grow during the bull times.
Interesting video; I wish I had more time for experimentation, but I'll be 50 by June, and I'm looking for ideas and suggestions on what investments to acquire to set myself up for retirement, especially with the looming inflation; my goal is to have at least $5 million by the age of 65.
You should have begun a long time ago, and considering you are not conversant with the market,, I'd recommend you seek advice or help from a financial expert to aid you in establishing a practical and achievable plan.
My advisor is actually quite known, so it was much easier for me to reach out, I'm in touch with Lisa Ann Moberly she has a web presence, so you can simply just search her.
Yes. However, the option volume is much less, and is only monthly, so the marketmakers will take a bigger cut when you buy and sell because spread between bid/ask is larger.
@@marksrink This strategy is best for retirement accounts which have limited option level trading. Most retirement accounts don't let people past level 1, a few allow level 2. Want to use a broad spectrum ETF that trades weekly where the option volume is huge like SPY, QQQ, and IWM. EEM if you want to do emerging markets. With a nonretirement account with level 3 option trading I would rather be doing credit spreads or some sort of ratio put spread with SPY or QQQ.
I honestly don't understand why you're discussing these dubious schemes. There are plenty of options like Eledator and similar ones that are fast and profitable.
What I just realized is if I buy 100 shares at $100 and sold a “covered call” option with a strike price of $110 and collected a premium of $200 and the stock rises to $115. I sold the stock at $110 price and now have to buy it back at $115 to get back 100 shares. So at first I spent $10,000 to buy the shares, sold for $11,000 = $1000 + $100 premium and now have to buy it back at $115/share = $11,500. That’s a loss of $400, right?
Very dangerous When It goes up, you lose appreciation and the stocks. When you have to buy them back, you will buy much less than you had When it crashes you take the full loss.
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Happy Friday! Make sure to leave your $0.02 in the comments below!
I'd retiring or working less in 8 years, and considering this financial recession, Im deciding to begin taking up skilled trades. I'm curious to know best how people split their pay, how much of it goes into savings, spendings or investments, I earn around $120K per year but nothing to show for it yet.
You should contribute to your retirement diligently, or better still look into financial planning don't come to youtube for advise, consult a Local or trusted online advisor
Very true, I find myself lucky enough exposed to money management at an early age. Worked full time when I was 19, purchased first home at 28 fact forward timo I'm 57 now not laid off
I consulted with an advisor to stay afloat and with subsequent investment, i am only 5% short of 1 million as of today
Recently, I've been considering the possibility of speaking with consultants. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
You're not doing anything wrong; the problem is that you don't have the knowledge needed to succeed in a challenging market. Only highly qualified professionals who had to experience the 2008 financial crisis could hope to earn a high salary in these challenging conditions.
Am 58 retiring next year but the thought of retirement gives me weakness. My apologies to everyone who have retired and filing social security during this time after putting in all those years of work just to lose everything to a problem you never imagined to happen. It’s so difficult for people who are retired and have no savings or loved ones to fall back on.
True, It has never been easier to understand how to build your money after retirement than it is right now with the inflation, when you may study and experience a completely variegated market passively by employing a successful portfolio-advisor. The impacts of the U.S. dollar's gain or fall on investments, in my opinion, are complex.
You are a comment troll!@RobertCooper03
You are a comment troll!@tudorrwilson
You are a comment troll!@RobertCooper03
Scam alert 🚨
Guys this is just an example using one sticker only. You can run 10 different ETF/stocks of say 40k and diversify the wheel. It can be way more lucrative than what he presented
What other ETF's you like?
Seen some good reviews on her , how do I connect
And to put beginners into considerations prop firms also profits from them. That’s why I’m impressed seeing people’s validations on theresa option system. nothing has come close to the sheer clarity, depth, and precision of her insights
How can you possibly call a .43 Delta "conservative?"
It’s not.
Lmao😂…right
He is so dangerous.
He's killing ppl. It's not only capping the upside with unlimited downside. It's losing on the upside. If you're stocks go up 10% and you're capped at 5% then not only you lose those 5%
But then when you go to buy back, you're buying less shares and therefore less covered calls in the next cycle and less income
He should be sued and reported to ftc or whoever
Haha more like .20 delta is still risky
@@rhoelg For sure. I typically use .15 delta
Great job. Loving the slightly longer format and detail you are putting into the videos lately. Sharing them with my parents as they are in exactly this situation.
This strategy assumes you won't need to sell your shares. Yet, if the stock price surpasses the option's strike price, requiring you to sell, repurchasing stocks to continue might cost more, cutting into profits despite the premium. Hence, opting for same-day expiry (0DTE) options is key to maintaining viability without significant setbacks
That’s when you’d sell cash-secured puts.
@@justsnappy Initially, the strategy in this video overlooks this aspect. Similarly, cash-secured puts face these issues too. Since market timing is elusive, risk mitigation is essential through using same-day expiry (0DTE) options
I usually sell Cash Secured put options, in addition to the put premium, I received about 5% on the secured cash in my M.M. fund. If the security falls below the strike I usually just roll it forward.
In my 50s, I'm focused on investments for retirement. I've heard of people generating substantial passive income, like someone who earned $650K in under a year on a podcast. What's the strategy for such returns?
Find quality stocks that have long term potential, and ride with those stocks. I have found it takes someone who is very familiar with the market to make such good picks.
My financial advisor has been a game-changer, providing clarity and boosting my confidence in navigating finance. With their help, I've achieved my goals faster than I imagined. Highly recommend!
Your advisor appears skilled. How can I contact them? I've recently sold property and aim to invest in stocks, seeking guidance.
*Vivian Louise Dehoff* is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
I just buy covered call ETFs available in Canada/USA and let the managers do the work! My current portfolio of $300,000 has a YOC just over 16% and started generating $4000 a month last month.
What ETFs do u own ?
Which ETF would that be?
Exactly qyld let the pros handle this just seems a bit to complicated
@@tonyd3010 I live in Canada so you might not have access to these. BANK, BKCL, CNCL, DFN, DGS, LBS, SBC, FTN, ENCL, HYLD, HDIF, QQCL, USCL, YTSL, BNS, TD, HMAX, UMAX, but I also have US listed SVOL, CLM, CRF, AMZY, CONY, OARK, NVDY, YMAX, SPYI, KLIP, ULTY, TSLY.
I keep a low delta with spy and a higher delta on single stocks with a strike price above basis. If I really like the stock and it tanks where i cant sell calls I buy a high delta put to lower cost basis. If my weight is now off balance I sell a call on extra shares at high delta at cost basis.
Thank you for explaining this. This is why I like covered call ETFs. I give up some of the profit, but I can get a 30-130% dividend from a stock I bought for $30 instead of having to put up $52k of my own money for 1 contract.
It all depends on your expense requirements. Your earnings don't matter if you don't have your expenses defined and contained as required.
You are selling a pretty high delta. Pretty high chance the shares get called away
Thanks for the education and sharing these strategies! 🙏
Hey Joe! I really like your video BUT.... I wished you had gone over other scenarios that are likely to happen when doing this strategy. Mainly, what happens when your option is exercised and you have to sell shares? Obviously you don't have those shares next week/month to use in your covered calls UNLESS you buy them back. There are a few unknown variables here but if the stock price climbs very high you can't cover the spread to buy back those shares. It would be great if you were a little more thorough here. Thank you, Charlie.
Good Video.. Curious about the downside protection strategy on the upcoming video.
ITM 80 delta calls or you wheel it 1 contract at a time with cash secured puts.
Really enjoying the longer content recently, especially when it comes to option related videos. Currently building toward 100 shares of IWM and SPY in my taxable and Roth IRA respectively to begin selling covered calls, keep up the great work!
You are the first youtuber who helped me understand the basics of the covered call strategy. You make sense to me...Thank you. Would love for you to develop a Live weekly course. I would gladly pay as your knowledge is invaluable and will like get me to finally pull the trigger on implementing this strategy.😂
So in theory the best thing to do is to load up on shares during a dip and write contracts out of the money you win either way
Very good video...keep up the good work Joe....if you have any information on the PMCC please do a video
What about if the covered call option is exercised? Then what? Buy back the 100 shares at a higher price and start selling covered calls on it again? Wouldn't that kill all profits and put you in the negative? And isn't selling contracts at such a high delta mean it's a lot more likely to get exercised?
Great video Joe! I'm only using about 9% of my retirement portfolio to utilize the 7-14 DTE options premium income strategy. I'm up 9.4% in the first three months (that averages out to 37.6% for the full year) of 2024 using cash secured puts and covered calls on a few different ETF's. I take those premiums and buy high dividend closed end funds along with some high div ETFs. Yes, I am creating multiple taxable events, but I'm prepared to manage the tax implications.
How do i start trading? I'm really interested but I just don't know how it go about it. I heard people really make it huge trading
Wow. I'm a bit perplexed seeing her been mentioned here also Didn't know she has been good to so many people too this is wonderful, I'm in my fifth trade with her
Her technical analysis are great, her interpretation/projections of the market is so accurate Stacey is one of the best trader i know to follow for advise and daily signals and you won't regret it.
I was trading fairly a small account and I got over 200% within one month. We need more traders like her in the space to guide the teeming population of crypto enthusiasts and traders out there
Extraordinary is the right word for expert Stacey Macken, she's experienced as a trader and so unique..
I'm currently on my fourth peddle with Stacey Macken also. She's the best!
These profits are true only if the ETF goes up on every contract. It does limit your losses when the ETF goes down but can also limit your profit if it goes above the strike price. These contracts also limit you to less favorable taxes as these are tax at regular income. If your retired on a set limited income, this may not impact you as greatly, based on what tax bracket you fall in. Another account is the fees by doing this weren't figured in either which isn't much.
Hi, in the example that starts at 2:30, the put option sells for $300. That's $3/share. The strike price is $517. Why doesn't the opportunity cost start at $517+$3, $520. If the stock reaches $519 and you're assigned, there isn't any opportunity cost. You actually made more money than holding the stock.
Hi - have you made that video yet where you explain how you would handle a down trending market when your main strategy is selling covered calls on one or more of the indexes? Looking forward to your thoughts. Thank you.
This just seems so risky to me. What happens when you are forced to sell your whole portfolio (the 7 contracts)... The premium wouldn't even cover your capital gains tax you'd owe! So then you're buying back into the market with less and at a higher price. And then, if you continue the strategy and are forced to sell again, you're potentially paying short term capital gains which again will eat your premiums for the month and even more of your portfolio.
If you are forced to sell you only get taxed on the gains. If you are that worried about taxes, find ways to write it off
Remember there’s no free lunch. You will pay taxes on the gains (shares called away) and you will pay taxes on the short term capital gains distributions (premium). Options aren’t all what it’s cracked up to be in my opinion and I’ve been doing options for about 15 years. The tax drag is annoying and when you need to enter the wheel again and sell a cash secured put and are forced to buy the shares at the strike and the market keeps falling and falling well now your stuck with your shares that you can’t write options with unless you want to write at a strict lower then your cost basis.
It's just another kind of gambling. Only now it's your retirement nest egg. Pass.
I use my IRA
NO TAXES DUE
THEN DRAW OUT TGE GAINS ONLY
@@dogelife7901what are some ways to write off our gains?
If the market crashes and you are all in index contracts your capital to make the income back is going to be diminished. You could say well a crash will kill anything and there is truth to that but this strategy seems especially susceptible to that especially if this is all their capital and only source of income. I could see this being a good strategy for a part of a portfolio but definitely not all. In a non crash scenario what happens when the market goes up a lot? So if you get called and your upside plus premium paid doesn't cover what it takes to buy the same amount of contracts? Also curious how quick the income could shrink in a bear market and how that affects premiums. It would be more helpful to see how this process works over time in terms of drawing income every month through different types of market cycles for me to view it as a case study of success. I'm not saying it doesn't work over time. I have no idea. But would need to see a lot more. I thinks its important you are more forward with the risks to people though and I didn't see that mentioned at all.
If you get your contract called away you could rebuy the underlying security or you could run the wheel strategy which is slightly more advanced.
Great video!! I wish more people would think like this!! Love watching videos like this.
Another great video sir - keep up the great work :)
Suppose I'm selling 10 contracts and I get called away and the price leaves without me. We'll next month I can only afford to sell 9 or worse 8 options. How does that affect me?
Thanks for the video, and thanks for even announcing at the end a next video how to react on the downside risk of the strike. I consider this the core risk. If the market price falls strongly after you bought 700 pieces of the SPY... How can this stategy be implemented on a sustainable long term way? If there is no way, you can just sell one time weekly options, or one time monthly options, and after a long time falling price of SPY it could become impossible to resell Covered Calls at the money or out of the money. A difficult situation when depending on that covered call income... Is there even any solution? Look forward to the next video then... Shouldn't Covered Call ETFs work better with a more consistant yield should this strategy work out sustainably? To the other end of maybe lost gaines in an upside market: do you roll these kind of covered calls before getting assigned? Or just buy back the parts of SPY at higher prices? or sell puts to get them back?
Wait for the next video.. But there's no free lunch
@@Wikidpalm Thanx. Do not expect free lunch, even if this does rather exist in the US than for a German tax payer... So i hope i will just learn something more here. As some solutions, as selling Calls slightly in the money are tax horror in Germany, so i hope there will be another idea to learn for me...
Thank you for your dedication. As you say, the market sometimes will go down, of course. But sometimes, you can execute the 30 days strategy many times in the same month due an early assingment, and the returns will be much higher than your initial calculations 😮
Furthermore, in the example of te SPY I think you have not taken into account the appreciation of the ETF. For example, if we were able to execute the monthly strategy twice a month, selling 7 Call options above the current price, say at 5 USD above (reasonable). And those two times we were assigned, we can conclude that we will earn good money too.
700Etf x 5usd x2 (times/month)
Let's say you're assigned on your put. You sell a covered call, but the next time the stock goes down further. Do you keep your covered call at the same strike price, or do you target the same delta? It seems like if this happens multiple times you could actually be losing more than your call premium is bring in .
Yes, however you would have lost more holding the stock.
The safe/correct answer is to never sell CC's at a strike price lower than your cost basis
While it's not "Income", don't forget the increased value of the SPY shares from $513 to $518 if you hit a "worst case" positive situation and the shares are called away from you. That's another $3,500 in gains. ($5 per share x 700 shares).
- Cheers
There’s no free lunch.
Fepi works passively but you're right.
if you sell covered calls do you have to own 100 shares of the stock in your account at the time of option selling transaction is taking place?
Retire in the Philippines. Live like a king on $2,000/mo budget.
Like a king? I doubt it I’m spending 1500+/week
Am I missing something here? You sell an option, the strike price is reached, so in the end you have the money from the option contract and the money from the sale of the stocks at the strike price. If the price of the stock went considerably above the strike price, then you have reduced the amount of shares you can then buy afterwards since the money you have from the sale, not including the money from the option contract which you're using to live off of, by definition can't buy the same amount of stocks you had prior to this scheme.
You are not missing anything. A big shift in either direction kills this strategy without more capital.
Love the wheel strategy. Why not try to just retire on dividends? I don't want to do the 4% distribution rule. I want that bad boy to keep growing. Pass that on to my kids. Let them roll it over into a Roth IRA or a taxable account and have a secondary income while it continues to grow.
Thanks Joe, do you feel safe doing this with the market up so much in the last year?
I’d be very cautious at market all time highs. Be fearful when others are greedy (Warren Buffet).
Looking fwd to the down market strategy
Thank you for the explanation
Thank you for the great information always. I have a question, please. What do you mean by 1 on 1 with Joe in the $90 per month tier. Do you mean the Zoom meeting will be 2 people only ( you and I) so I can show you my brokerage account, and you will help me with my questions and set up a correct investment strategy???? Thank you once again.
I kind of follow, but what is the downside? For your first example you had it where you could do 7 contracts, what if they hit the and you have to sell everything. Wouldn't the majority of your premium payments get wiped out by capital gains taxes and having to buy all the ETFs again?
You could switch to selling puts to make income and get back into SPY.
The downside is, you have capped upside meaning if the market has huge gains, you miss out. Also, you are correct. If you want to continually run covered calls, you have to by back in at a higher price every time your call is exercised, meaning your capital will erode over time. There are etfs out there that run covered call strategies, and they do provide great cash flow, but the value goes down over time. This strategy is okay if you need cash now, but terrible for long term growth.
Why in the world would you completely eliminate your potential for capital appreciation by selling ATM CC? These ATM strategies that hard cap your upside are terrible.
Thanks for the great content! I got started late saving for retirement so I will be retiring with less than $1M. I will be using dividends and options trading to produce income for my retirement.
You better do that now to learn how to do this. . Once retired you cant make a mistake
I started with options in 2020 and have been tracking my progress since. I have been made some mistakes, but I am learning along the way. I am refining my system so I should have a system down when I plan to retire in about 6.5 years.@@ralphpal
As always, and enjoyable and informative video. Thanks!
There's definitely a risk to the underlying security if there's a prolonged market downturn, though one might be able to mitigate a bit by using some of the covered call income to dollar cost average downward -- but in fairness, I haven't done the math on this.
Another possible mitigation and less commitment of capital is to write poor man's covered calls and invest the remainder of a smaller portfolio in something more stable as a hedge. As before, though, I haven't done the math on this, either, to know how much havoc a long-term downturn would wreak on the LEAP.
What is the typical capital gains rate on the income generated by this strategy?
In the US it is ordinary income, or nonqualified dividends. So not very tax efficient if you are doing this strategy in a taxable account.
More great content!! Thanks Joe
I cannot wait for the next video because everything presented here ends in pain during the next prolonged market downturn. When that happens your capital base is smaller and you won't be able to generate as much premium on a % basis. An awful 1-2 punch if this is your entire income.
Good luck.
Can you loose doing this
Great Video: Question are those bid and ask prices unique to Fidelity? Are bid and ask prices the same or different from broker to broker?
I assume these are American style so the very next day SPYD went up from $513 to $518 or about 1% and your shares would have been assigned away. you pocket the 1% capital appreciation and the premium of $300 or about 0.6%... then you sell a cash covered Putt? But you would need to wait a few days for the premium % and the cash from the sale/assignment of your shares to hit your account so there are a few days where you can't write an option???
Also: What are the fees for selling contracts and fees if you get assigned, I notice you don't factor those in??? Why is that???
I'm retied and interested in utilizing these strategies to reduce the erosion of capital in my Roth IRA, so I'm looking forward to the follow up video(s). My question relate to previous videos where you talk about rolling an option. To be honest I don't understand what this entails or when you would do this and what are the consequences, Could you explain when you'd need to do this, Better yet, how about a video explaining this in detail using these strategies?
Rolling a position is simply put closing out (buying back) your current short call (the one you sold) as you approach the time it expires and then you sell a new one at a later expiration date. This can be done is a single order called a vertical debit spread BUT it is entirely unnecessary to roll in one order. Although its quite easy, you will get the same result by simply closing (buying) back the options you sold which closes that trade. Then turn right around and sell new options at a further dated expiration. Some people might try to put up the argument that you save commissions or save money on the bid-ask spread by rolling in one order but in reality you don't. Most option trades take place at the 'mid' price anyway whether it's single options or combination spread trades. Since this is possibly all new to you it would be simpler to just close the first position and open a new position.
@@J123Gthe only reason I can think it might be necessary to roll over closing one and open another would be if there isn’t enough cash to cover the current short in the account. If most cash is withdrawn to live on or reinvested, this could be the case.
Can you just do one for roth ira living off dividend only?
thanks Joe...
Basically, a version of the wheel strategy.
exactly
Um...how is this a version of the wheel strategy when there are no puts being sold in order to get into the position?
Just because there is part of the wheel strategy used doesn't mean that this is a version of the wheel.
This has zero to do with the wheel strategy.
@@mjs28s It is the wheel strategy. You can do the wheel strategy with puts or covered calls. Also, eventually, when your puts are put to you you will be long and have to sell covered calls. There is little to no difference in financial outcome. Thus, it is the wheel strategy.
Sell covered calls against deep ITM LEAPS and generate the same weekly income with significantly less capital up front!
Hi Joe thank you for your videos, wonder if you can do a video for someone like myself who is 68 , has 100 k , lives in Bali indonesia and would like to generate at least 3-5k a month income and also keep capitol appreciation and some growth, but options seem too difficult ,im just learning investing, these Ymax seem too risky as you pointed out, im Im totaly out of my depth in the financial world but learning the best i can, would love to have sustainable monthly income with My Fathers Legacy he has so.lovingly and generously. given, He would have wanted this im sure also, His son never learned finance.:) maybe a few suggestions, or i may have missed another of your informative videos that covered this topic? thank you for your kind help,. Peter
First rule to retire early....only own and ride an electrical Scooter.
if the market tanks 15% within 60 days for example you need a long time just to recover the loss, that's what you ignore. This strategy only works in a bull market or a sideway market.
if a moon sized meteor hits the earth it blows up
This strategy works if you're ok with a paper loss for a few months or years. You need to make sure that there is some upside for each call you sell, this will allow your investment to grow during the bull times.
Interesting video; I wish I had more time for experimentation, but I'll be 50 by June, and I'm looking for ideas and suggestions on what investments to acquire to set myself up for retirement, especially with the looming inflation; my goal is to have at least $5 million by the age of 65.
You should have begun a long time ago, and considering you are not conversant with the market,, I'd recommend you seek advice or help from a financial expert to aid you in establishing a practical and achievable plan.
Great stuff!!
How do you hedge when the market take a negative dive of 10-15% down turn. Any thoughts on this greatly appreciated.
It seems you also use a tutor, what is the procedure like? Has working with a financial advisor proven to be beneficial to you?
Nice summary, so who is the coach that tutored you? And how can I contact them, i'm in need of their skillset.
My advisor is actually quite known, so it was much easier for me to reach out, I'm in touch with Lisa Ann Moberly she has a web presence, so you can simply just search her.
Can you carry out the covered call with VOO?
Yes. However, the option volume is much less, and is only monthly, so the marketmakers will take a bigger cut when you buy and sell because spread between bid/ask is larger.
So whats the best to buy?@HateDietPepsi
@@marksrink This strategy is best for retirement accounts which have limited option level trading. Most retirement accounts don't let people past level 1, a few allow level 2. Want to use a broad spectrum ETF that trades weekly where the option volume is huge like SPY, QQQ, and IWM. EEM if you want to do emerging markets. With a nonretirement account with level 3 option trading I would rather be doing credit spreads or some sort of ratio put spread with SPY or QQQ.
I honestly don't understand why you're discussing these dubious schemes. There are plenty of options like Eledator and similar ones that are fast and profitable.
....If you are healthy.
My eyes glaze over every time I hear about covered calls. It's too much work, too confusing, and sounds too much like gambling.
What I just realized is if I buy 100 shares at $100 and sold a “covered call” option with a strike price of $110 and collected a premium of $200 and the stock rises to $115. I sold the stock at $110 price and now have to buy it back at $115 to get back 100 shares. So at first I spent $10,000 to buy the shares, sold for $11,000 = $1000 + $100 premium and now have to buy it back at $115/share = $11,500. That’s a loss of $400, right?
Start selling puts to collect more premium while you wait for the stock to pull back
@@Kk-iw4ck so puts is better to sell than calls?
@@jays_trading_institute
If you don't own the stock and would like to buy it cheaper sell puts.
If you sold calls and it was called away, sell puts.
So many things in this are misleading or outright incorrect.
Who is retiring on $40,000 a year? 😊
In portugal would be a dream
Very dangerous
When It goes up, you lose appreciation and the stocks. When you have to buy them back, you will buy much less than you had
When it crashes you take the full loss.