💰 Join my Patreon to get access to all my Live Trade Alerts, Open Orders and Weekly Top 5 Stocks: www.patreon.com/mylifeoflearning 💯 My Options Trading Online Course: mylifeoflearning-randy.mykajabi.com/offers/EgeavtWJ 👉 Unlock a special discount on Seeking Alpha's subscription! Start your FREE 7-day trial using my exclusive discounted affiliate link: www.sahg6dtr.com/B37MNP/R74QP/ 🔔 Subscribe to this channel for Free stock and option trading Tips: ua-cam.com/users/MyLifeofLearning 📕 Get a copy of my My Option Trading eBook "New Beginnings: The Option Trading Story" amzn.to/2OgXx58 📕 📈 Purchase My Spreadsheets (as seen in my videos): etsy.me/3HHq5ge 📺 Watch Next: Explaining Option Assignments: What You Need to Know: ua-cam.com/video/RrWEqdmUYOI/v-deo.html
Thanks for this refresher. I've been using these strategies and selling put credit spreads on AMZN to fund the repair of my covered call since the stock has rocketed all 2023. Bought my shares in 2014 so I'd rather do this than lose my shares and pay capital gains.
Another great video, Randy. I look forward to them every week. If I may share, one thing I like to do at times is to use some of the premium that I collect by selling the call(s) and buy a few more shares that I can leave uncovered so I still get some upward potential if the stock continues higher. Thank you for your work!
About halfway through this video i started having foashbacks to 6th grade math class and word problems. If you enjoyed word problems, you too may do well as a stock snd option trader 😁
Yes, you should always be able to roll your options out. It's just a matter of if you want to roll them out, the same, strike price, up, or down. Then it's a matter of will you be able to do it for credit or will it require a debit. Here's a video on that subject I think will help: ua-cam.com/video/cwoqR5fNHkA/v-deo.html
What about a call diagonal such that the further dated long covers your existing covered or naked call option. The short of the diagonal expires before your existing call turning your overall position into a simple spread in the end.
Sure you could do that if you were trying to replace a covered call and didn't care if you received the dividends. You just want to keep an eye on the Delta of your short call versus long call. If the short near term call went in the money, its Delta might become higher than the Delta of the long call you own. But what you described is another potential way to trade a moderately bullish position. If you're not familiar with them, you might also consider how you could use LEAPS options. Here's a whole playlist dedicated to that: ua-cam.com/play/PL3j38I2YtGw3d2osU5O6XRHJ8-Wul2ZW7.html
If you sell cash secured put options, yes, you are on the hook for them. The amount of margin required depends on what type of margin you’re approved for and the fluctuations in the market.
If somebody does not need the capital and does not want to pay taxes on capital gains, can they just roll out the covered call at the same deep ITM call indefinitely? What are the risks other than opportunity loss by having capital tied up?
Theoretically yes. The challenge comes as the CC (covered call) gets deeper and deeper (in the money) ITM. When that happens and there isn’t any time value or extrinsic value left, the possiblity of assignment goes way up. That’s almost guaranteed if it’s a dividend stock about to go ex dividend and the dividend is more than the time value or extrinsic value of the call option. Here’s a video that will help explain that: ua-cam.com/video/RrWEqdmUYOI/v-deo.htmlsi=CJtoMjIDyblGZsUc And here’s a video series dedicated to covered calls: ua-cam.com/play/PL3j38I2YtGw0GuZi4OOSzGcx3Oq_SMr2K.html&si=wLJw2BdfMiTwssv7
So many trades. How complicated are your taxes with all those buy/sell when rolling options? I started following you this year and started trading CC and Puts. I’m super nervous about what my tax documents will look like when I get them next month!
💰 Join my Patreon to get access to all my Live Trade Alerts, Open Orders and Weekly Top 5 Stocks: www.patreon.com/mylifeoflearning
💯 My Options Trading Online Course: mylifeoflearning-randy.mykajabi.com/offers/EgeavtWJ
👉 Unlock a special discount on Seeking Alpha's subscription! Start your FREE 7-day trial using my exclusive discounted affiliate link: www.sahg6dtr.com/B37MNP/R74QP/
🔔 Subscribe to this channel for Free stock and option trading Tips: ua-cam.com/users/MyLifeofLearning
📕 Get a copy of my My Option Trading eBook "New Beginnings: The Option Trading Story" amzn.to/2OgXx58 📕
📈 Purchase My Spreadsheets (as seen in my videos): etsy.me/3HHq5ge
📺 Watch Next: Explaining Option Assignments: What You Need to Know: ua-cam.com/video/RrWEqdmUYOI/v-deo.html
Thanks for this refresher. I've been using these strategies and selling put credit spreads on AMZN to fund the repair of my covered call since the stock has rocketed all 2023. Bought my shares in 2014 so I'd rather do this than lose my shares and pay capital gains.
Thank you for sharing
Another great video, Randy. I look forward to them every week. If I may share, one thing I like to do at times is to use some of the premium that I collect by selling the call(s) and buy a few more shares that I can leave uncovered so I still get some upward potential if the stock continues higher. Thank you for your work!
Great idea
About halfway through this video i started having foashbacks to 6th grade math class and word problems. If you enjoyed word problems, you too may do well as a stock snd option trader 😁
very very nice video. like the diff ways to pay for the rolling
Glad you liked it!
My strike price is my prrice target for the stock. Pays less, but makes it easier to have shares called away
Can I roll a losing call option for later date in-the-money call option?
Yes, you should always be able to roll your options out. It's just a matter of if you want to roll them out, the same, strike price, up, or down. Then it's a matter of will you be able to do it for credit or will it require a debit. Here's a video on that subject I think will help: ua-cam.com/video/cwoqR5fNHkA/v-deo.html
Another great video. Thanks, Randy.
Glad you enjoyed it
What about a call diagonal such that the further dated long covers your existing covered or naked call option. The short of the diagonal expires before your existing call turning your overall position into a simple spread in the end.
Sure you could do that if you were trying to replace a covered call and didn't care if you received the dividends. You just want to keep an eye on the Delta of your short call versus long call. If the short near term call went in the money, its Delta might become higher than the Delta of the long call you own. But what you described is another potential way to trade a moderately bullish position.
If you're not familiar with them, you might also consider how you could use LEAPS options. Here's a whole playlist dedicated to that: ua-cam.com/play/PL3j38I2YtGw3d2osU5O6XRHJ8-Wul2ZW7.html
So, you are on the hook for all the CSPs? That requires a lot of margin.
If you sell cash secured put options, yes, you are on the hook for them. The amount of margin required depends on what type of margin you’re approved for and the fluctuations in the market.
Why not buy longer term protection... like for 6 months? And then continually roll against it?
That would be another good option
There are costs in rolling options. Remember, market can stay irrational than you may stay solvent.
Great video
Thank you
If somebody does not need the capital and does not want to pay taxes on capital gains, can they just roll out the covered call at the same deep ITM call indefinitely? What are the risks other than opportunity loss by having capital tied up?
Theoretically yes. The challenge comes as the CC (covered call) gets deeper and deeper (in the money) ITM. When that happens and there isn’t any time value or extrinsic value left, the possiblity of assignment goes way up. That’s almost guaranteed if it’s a dividend stock about to go ex dividend and the dividend is more than the time value or extrinsic value of the call option.
Here’s a video that will help explain that: ua-cam.com/video/RrWEqdmUYOI/v-deo.htmlsi=CJtoMjIDyblGZsUc
And here’s a video series dedicated to covered calls: ua-cam.com/play/PL3j38I2YtGw0GuZi4OOSzGcx3Oq_SMr2K.html&si=wLJw2BdfMiTwssv7
So many trades. How complicated are your taxes with all those buy/sell when rolling options? I started following you this year and started trading CC and Puts. I’m super nervous about what my tax documents will look like when I get them next month!
If I remember correctly, it’s just two forms that my broker gives me that I hand to my tax preparer. They don’t have to input it Trade by Trade.