Poor Man's Covered Call Explained! 📈

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  • Опубліковано 6 вер 2024

КОМЕНТАРІ • 45

  • @justinnine4940
    @justinnine4940 Рік тому +12

    Buying a 12-month call is better than buying a 6-month call for the PMCC for three reasons, because (1) a longer dated option has less time decay per day. (2) a year long option fluctuates less and thus requires less rolling due to drifts in delta. (3) a long-term option allows time for the underlying to recover from price shocks. At the end of the day, we want the long call to mimic the stock's performance, not as a tool to do leverage.

    • @averageoptions
      @averageoptions Рік тому

      Great insights there. TQVM.

    • @extrabarba
      @extrabarba 6 місяців тому

      Why do not use a higher delta in the long call than the short call, in case you get assigned in the short call you make money anyways

    • @justinnine4940
      @justinnine4940 6 місяців тому

      @@extrabarbabecause high delta calls are expensive. PMCC wants things to be cheap...

  • @user-hw3tj5nw4d
    @user-hw3tj5nw4d 3 місяці тому +1

    What brokerage acct were you using for the daily trades. You moved from Robinhood to another firm.

  • @udarpavarota396
    @udarpavarota396 8 місяців тому +1

    I don't understand. I buy the Deep in the money call. And then if the stock starts falling? Also if I sell an Out of the money call and the stock closes above strike price on expiration date, what happens? I wish I could see how to do it on a real live PMCC. A real example.

  • @jacquesveillette3068
    @jacquesveillette3068 2 роки тому +8

    Good presentation. However, there is nothing specific about how to manage the trade if it goes against you, which is essential to that kind of trade. A well defined complete game plan is essential.

  • @storeymark
    @storeymark 5 місяців тому +1

    I don't know the date when the gis play was entered. Hence I have no way of know how many months out you placed your long call and likewise your short call.can you please provides that info.

    • @terryneal5569
      @terryneal5569 4 місяці тому +1

      it looks as if this was entered around the beginning of May 2022 and the short call was 43 dte $75strike June 17 and the long call was Oct 21 , 169 dte $62.50strike, look around the 16:50 minute mark on the video and you will see the dates. What I don't understand is how the 62.50 was a .80 delta and was only 7.50 from the market price of the stock price.

    • @user-uc5qz7qn9s
      @user-uc5qz7qn9s Місяць тому

      She had been fumbling all over the place- telling us 60 to 70 delta but typed 80 and said it was 75.
      I felt like pulimg my hair multiple times through the marathon video.

  • @jdjprimer19
    @jdjprimer19 2 роки тому +2

    Comparing the profit potential of the CC vs. PMCC, I believe the formula is wrong for CC. It says (cost of shares - premium paid) + short strike. Shouldn't it be the difference of strike price and share price + premium paid? For instance, if you follow the formula verbatim it would be 7075-60= 7015 + 75. That would be incorrect, or the wording simply isn't clear. It would be better worded, strike price- stock entry price + premium received.

    • @OptionsPlay
      @OptionsPlay  2 роки тому +1

      Thank your feedback, the wording is intended to amplify that the addition of the premium reduces the cost basis of the shares purchased, capped at the short strike price. It is in this order as the previous row in the table is maximum risk expressed as (cost of shares - premium paid). You are correct in that both equations result in the same number. I do agree that we can add some clarification as the equation is an extension of the first and therefore should be expressed as a negative number. We could absolutely clarify better, thank you for pointing that out!
      For example:
      Buy 100 AAPL at $140
      Sell 1 AAPL $150 call at $2
      In the slide deck: (cost of shares - premium paid) + short strike = -($140 - $2) + $150 = -$138 + 150 = $12
      Comment: (strike price - share price) + premium paid = ($150 - $140) + $2 = $10 + $2 = $12

    • @jdjprimer19
      @jdjprimer19 2 роки тому

      @@OptionsPlay Thanks for your response!

  • @frankk3880
    @frankk3880 2 роки тому +5

    This video was confusing. I wish it were more detailed.

    • @fernandodavidez757
      @fernandodavidez757 Рік тому +2

      Check out Tony's videos (her boss), she assumes we know more.

  • @jacquesveillette3068
    @jacquesveillette3068 2 роки тому +1

    It would be important to see the date the video was produced.

  • @victorpistone1073
    @victorpistone1073 Рік тому +1

    Why not sell 0-3 DTE shorts you get a ton more premium.

  • @hl7843
    @hl7843 10 місяців тому

    If you have a PMCC on SPY and keep rolling it out indefinitely, how does it compare to just buying and holding the S&P500 ?

  • @Giggidygiggidy12
    @Giggidygiggidy12 2 роки тому +2

    For a poor mans covered call, is it better to sell a longer dated call(leap) at the money or in the money? How far out is required or recommended to qualify that leap as collateral for the short call being sold weekly or monthly?? What's the risk selling a leap vs owning shares to do this strategy?

    • @OptionsPlay
      @OptionsPlay  2 роки тому +4

      For a poor man’s covered call, you would want to sell a 30-40 DTE ~15 Delta call against your long call options. Typically you want to use a 6-9 month LEAP against the short call. You do not want to sell a LEAP, only short dated options.

    • @knm185
      @knm185 5 місяців тому

      @@OptionsPlay can you use a 6-9 month Leap Call that is 'out of the money' which would be cheaper than an 'in the money call'? And be less risk?

  • @schedule
    @schedule 2 роки тому +1

    Thank You for your insight!

  • @jeanphi0078
    @jeanphi0078 Рік тому

    thanks can I have access to the replay of this video

  • @fernandodavidez757
    @fernandodavidez757 Рік тому +1

    Tony has a better mic why not roll out the same hardware to all employees.

  • @nnrq822
    @nnrq822 2 роки тому

    Is it okay to do this as two separate legs or is it intended traditionally as a spread?

  • @xbot2445
    @xbot2445 Рік тому +1

    Beautiful!! 🥰

    • @Gettin_chunky
      @Gettin_chunky Рік тому

      So I’m not the only one who noticed how attractive she is

  • @satishvankineni5000
    @satishvankineni5000 Рік тому +2

    Video is not clear for new guy. Should do it again.

    • @fernandodavidez757
      @fernandodavidez757 Рік тому

      Check out Tony's videos (her boss), she assumes we know more.

  • @alanlajoie7307
    @alanlajoie7307 2 роки тому

    Need help signing up

  • @Merritt_Life
    @Merritt_Life 2 роки тому +1

    Tons of insight. Great video

  • @victorpistone1073
    @victorpistone1073 Рік тому

    Why not sell 0-2 DTE shorts to make your long money back fast. You can always roll out if your short is challenged.

    • @s2xy492
      @s2xy492 7 місяців тому +1

      Thinking about that already few days... Why would you wait? 0-3 dte with high premium. Your option get executed? not a big deal. Premiums are collected. Execute your leap and start new cycle. Am I wrong? Going to try it

    • @victorpistone1073
      @victorpistone1073 7 місяців тому

      @@s2xy492 Sounds good, the only problem is if the ETF drops a lot, then you have to sell your shorts way OTM. You don't want your short to get run over. So sell at 16 delta or lower a few days out. Then you have time to roll it out & up if challenged.

    • @guillermomartin8248
      @guillermomartin8248 7 місяців тому

      how'd that work out for you?@@s2xy492

  • @sherkhet
    @sherkhet 2 роки тому +1

    Excellent educational video - plz keep ‘em coming.

  • @bibbidi_bobbidi_boob
    @bibbidi_bobbidi_boob Рік тому

    👏👏 Very nice

  • @awakenpoemquotes
    @awakenpoemquotes 2 місяці тому

    i only sub because jessica is here

  • @timmoore9736
    @timmoore9736 Рік тому

    Your sound is washing out.

  • @user-uc5qz7qn9s
    @user-uc5qz7qn9s Місяць тому

    If your target is 75, thats straight $400 target gain. Why have the hassle of 0.6 premium call over 7000 capital. A bad anlogy ir example. And Madam, why gamble with small unknown stock rather than SPY or QQQ or SPX, which is more liquid, a criteria you emphasized but did not choose. You told to choose 2 months beyond short call and took 4 moths out. So, we got confused like Biden is shown wandering aimlessly on stage in social media these days.
    Finally, you could have trimmed the final production video to edit out pauses and keep it under 14 minutes, the average video length for impactful and engaging option classes. Try to keep your fimats like those of SMB Capital's Seth Freudberg.
    Major handicap was lack of probability of this strategy making intended profit. That % is super duper imortant before placing the trade.
    But I liked your pronunciatons the most.

  • @marktowler4871
    @marktowler4871 2 роки тому

    1