50X Poor Man's Covered Calls Strategy in Robinhood

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  • Опубліковано 5 лис 2024

КОМЕНТАРІ • 150

  • @dereklee1003
    @dereklee1003 Рік тому +5

    hey Henry how do I buy multiple call or sell option because on mine it says i can only buy a single call or sell option please help me

  • @hannahkusutton5795
    @hannahkusutton5795 6 місяців тому

    Thanks again Henry 🎉 I have a question about robinhood mobile app there is no costom orders there for I can trade leap option or pore man cover calls. Thanks 😊

  • @jamiehackney4420
    @jamiehackney4420 3 місяці тому

    Henry do I have to have level 3 on Robinhood to do PMCC?
    I cant get approved.

  • @270eman
    @270eman Рік тому +8

    Henry I am trying but robinhood said, "nah". Level 3 options won't enable

  • @pedrosalcedojr6463
    @pedrosalcedojr6463 2 місяці тому +1

    do you need a level 3 account on robinhood to be able to do call spreads

    • @antbanks5208
      @antbanks5208 13 днів тому

      Yes. If Robinhood wont turn on for you, then you can use tasty trade. They let you do spreads like the pmcc right out the gate.

  • @TheDale53
    @TheDale53 Рік тому +2

    I understand wanting to buy a leap with a Delta of about .7-.8, but isn’t the Delta changing all the time depending on the price per share?

    • @arniepodorski1862
      @arniepodorski1862 Рік тому +3

      Yes, delta changes depending on how deep the call is in the money. Unless the stock is extremely volatile you should not be too worried about the delta moving, unless the stock tanks. Also, you probably would not want to do the poor man's covered call on a highly volatile stock.

  • @chocotv3573
    @chocotv3573 Рік тому +1

    What will happen to the LEAPS when I get assign in my short call?

    • @SeekingValue123
      @SeekingValue123 Рік тому

      You will exercise your calls to pay off the leaps.

    • @thehobby-smith
      @thehobby-smith 7 місяців тому

      That is the worst that can happen, you have to be on top of it really. You will lose money.

    • @rivenhackney6203
      @rivenhackney6203 2 місяці тому

      @@thehobby-smith you wont lose money if you pick the right strike price just make sure difference in strike price X 100 - the premium of leap + premium collected from short call to find the profit if forced to exercise. for example a leap with strike of 360 and short call strike of 460 the difference is 100 X 100 so $10000 - premium to purchase leaps $9300 = $700 + premium collected $200 = profit of $900. as long as you're doing the math you can protect yourself if assigned

    • @dennisbbb
      @dennisbbb 7 днів тому

      Simple, buy 100 shares by end of Friday. On Monday, continue selling another call option. 😂

  • @Crowe828
    @Crowe828 Рік тому +2

    So I really been trying to study options and I think NOK seems to to be closest to everything you have said. Would that be a good choice?

  • @Freneticly
    @Freneticly Рік тому +11

    Thanks for explaining the strategy. Good video, thanks.

  • @josephsaeteurn9158
    @josephsaeteurn9158 11 місяців тому

    if you open a PMCC, and sell CC against that, you have 2 positions on 1 trade. how do you roll the short CC out on a trade that has 2 positions?

    • @jessecoleman9451
      @jessecoleman9451 7 місяців тому +1

      This isn’t correct. The pmcc is one play. The long call is the “leaps”. The short is short term. The short term contact will expire with profit( hopefully) leaving you with only the long call or leap. Then you repeat the process.

  • @uncletan888
    @uncletan888 8 місяців тому

    So if the price goes above the Sell Call strike price and we have to exercise it. Than we can close it with the long period Buy Call and it will still profit and we do not have to Buy the stock. Mean closing the Buy Call and Sell Call together.

  • @CRpatriot
    @CRpatriot Місяць тому

    Can you close before the expiration date or do you have to wait until it expires?

    • @TechWorkshop
      @TechWorkshop Місяць тому

      You can close the strategy before the expiration date. Waiting till expiration will simply increase your profit

  • @AhmadAlsahli-j7y
    @AhmadAlsahli-j7y Рік тому +1

    do you recomend useing margin to buy in the money options (i have 10k cash and my purchasing power is 40k) then use PMCC?

    • @alexandercinq3962
      @alexandercinq3962 Рік тому

      Can’t use Margin with options

    • @janshuster1426
      @janshuster1426 9 місяців тому

      Don't EVER use margin.
      The point of buying call leaps is to buy 100 shares when you can only afford 50
      You are effectively buying on margin without paying margin interest.
      I buy 2 year 50% current price and sell 1 year out with premium to just cover the extrinsic premium of call I bought.
      So stock may be $50, I buy a 2 year $25 and sell a $75 ( or higher ) 1 year.

  • @echolitis
    @echolitis 5 місяців тому

    Got a question, If the stock is getting near the Short Call (Covered Call) Couldn't I just buy it back then my long call that is over a year out (leap option) continue to make me money if the stock is moving a lot so I'm not limiting my profits of the covered call?

  • @teekith3373
    @teekith3373 Рік тому +74

    No one mentions what happens when the price goes below the leap option strike price. To sell calls against a leap that is below the leap strike price, most brokers require margin to make up the difference, because your leap collateral is close to worthless regardless of time frame. Just because you can do this, doesn't mean its a good idea.

    • @RealTalkCali
      @RealTalkCali Рік тому +23

      Yup got REKT doing these types of spreads. Best to just sell puts and sell calls if you have the Shares

    • @nitrok3418
      @nitrok3418 Рік тому +10

      Also, try not to buy around results or any macroeconomic events.

    • @DarkKnight2.7
      @DarkKnight2.7 Рік тому +9

      Even I could see this a mile away and I’ve never used this strat. Really? All that risk to collect a premium? Rather just risk $300 to make $250 on a debit spread that expires months out and put a reasonable stop loss….

    • @brianciofani4698
      @brianciofani4698 Рік тому +1

      Yes!!

    • @mosheLyons
      @mosheLyons Рік тому +1

      @@DarkKnight2.7 What would be a reasonable stop loss?

  • @aloysiusfu
    @aloysiusfu Рік тому +1

    Since you may be selling an ITM call with this strategy, what are the risks of getting assigned early before expiration?

    • @udy0243
      @udy0243 Рік тому +1

      You would get assigned 100% i am an example for that. I found 1400X play and took the risk… got assigned. Nothing to be panicked as long as your option is in the money. But if your option is out of money… you are screwed.

    • @J123G
      @J123G 6 місяців тому

      You are buying the deep itm call. Not selling.

  • @ChordNerd408
    @ChordNerd408 Рік тому +1

    What happens if you get assigned? Do you have to buy the shares at current price?

    • @cannedtuna6114
      @cannedtuna6114 Рік тому +1

      @@shenghuo9920 dude it’s a bot do not trade those options it’s highly risky

    • @udy0243
      @udy0243 Рік тому

      You will inly get assigned when the position you shorted/sold ends up in the money.

  • @RAMZIAARON
    @RAMZIAARON 23 дні тому

    Im having trouble wrapping my head around rolling up to $92 strike when I thought it would be necessary to roll above the current price of the stock... I know I'm missing something...Maybe I will just have to dig around the options chain to understand it.

  • @Veronica-d3g2j
    @Veronica-d3g2j Рік тому

    Can you make videos on how to know what stock is on the up?

  • @tomm9584
    @tomm9584 Рік тому

    I understand a covered call that's in the money as you're describing in this can be called away Anytime by the option purchaser so how do you stay or keep your role in the money for this type of situation

    • @realestate_sc
      @realestate_sc 6 місяців тому

      Typicaly if you roll or close two days of expiration it is rare tor them to be called over. Even if your call sold (strike price) is lower than the current market price two days prior, its still more expensive then outright buying the asset. So chances are low. You'r worry is to set alerts to know if its getting too close to these parameters and just roll over (in most circumstances).

  • @qntainmnt
    @qntainmnt 9 місяців тому

    Tesla is probably not the best stock to do a pmcc on, as the high volatility has a high chance of decimating the short call

  • @optionfinder3663
    @optionfinder3663 Рік тому +4

    Why does your acct size matter? If the strategy works, why do you not still do it? You could spread your capital along more positions.

    • @luissapple1
      @luissapple1 11 місяців тому

      Once you get to a very large account you are kinda limited. You won't be able to just do any play your want because you won't get filled fast enough to adjust to the market. Maybe SPY ETF is what you can play with once you have a very large account.

    • @samuelcoicou368
      @samuelcoicou368 8 місяців тому +1

      When you do a poor man's cover call you are limiting the potential to have unlimited prophet. People talk about letting your winners run, well with a poor man's call you are restricted to the maximum you're locked into and that's it. Whereas with a regular covered called, you can let it run and get potentially way more profit in return

  • @michaelgavin1909
    @michaelgavin1909 Рік тому +1

    Very informative Henry, just a question though. When purchasing the leap call option, a it seems a lot of premium goes into the time frame. Say for instance you are selling. A 0.2 delta call against your leap, and it becomes in the money and you start to take a loss. Is there anything that can prevent you from getting assigned and having to sell your leap? Or would that not matter as much since if the call you sold at 0.2 delta is now in the money, that means that your leap also has grown substantially from the rise in price for an overall profit?

    • @arniepodorski1862
      @arniepodorski1862 Рік тому

      Hey, I am late to this comment but I just wanted to say that technically you are taking a loss on the short option but that long option is increasing in value, so what you can do with that short option is actually roll it farther out and higher up, hopefully for somewhere where it is worth now. Example: Say you sold the call for 100 dollars. The price raised and now the option is 200 dollars and it expires in a week. Roll that option out and up to a price and time maturity that the new option you are selling is around 200 dollars so that not only are you covering the 100 dollars you originally were selling for but also the other 100 that would have been the loss. Hope this helps.

  • @brianquigley6862
    @brianquigley6862 9 місяців тому

    Henry, great video. Soooooo much valuable info here. I trade diagonals all the time. Can you please tell me how you hedge this set-up. I'm NOT concerned with upside gap bc I set up the diagonal so no loss on upside. If XYZ gaps up i usually don't chase. I take profits and run, but what about downside GAP, how do you mitigate that risk? Downside is most concerning to me.
    Thanks for this very good video.

  • @wbaglovers8417
    @wbaglovers8417 Рік тому +1

    How can I join the class?

  • @udy0243
    @udy0243 Рік тому +4

    Be aware Butterflies are risk of getting assigned. Since you sell the combination of call and put credit spreads… there is a fair chance your sold positions will end up in the money either side. My 2 cents.

    • @1Scital1
      @1Scital1 Рік тому

      You can't be assigned on Robinhood...

    • @udy0243
      @udy0243 Рік тому

      @@1Scital1 i got assigned once… luckily i had one of my Long position in the money… i escaped with manageable losses.

    • @dominickstewart433
      @dominickstewart433 Рік тому

      @@1Scital1I’ve been assigned

  • @FairfaxBrakes
    @FairfaxBrakes Місяць тому

    what platform / broker is this ?

  • @richardgordon
    @richardgordon 2 місяці тому

    Thanks for an excellent presentation/explanation! Much appreciated 😊

  • @Veronica-d3g2j
    @Veronica-d3g2j Рік тому

    U don't mention why ever a company will go uo ir down?

  • @udy0243
    @udy0243 Рік тому +2

    Rollover strategy doesn’t make sense… since you are loosing the intrinsic value… either you rollover or sell and buy again… its exactly the same… the inly reason why you rollover is, to have the collateral intact when you have open state short options you sold to someone.

  • @dmartin7203
    @dmartin7203 9 місяців тому

    In the example you used, PLTR is currently at $7.40. If you buy a call option at $5.00, what if you had to buy it right away because it's in the money. That part confuses me and I can't seem to understand.

  • @OGCAMG
    @OGCAMG Рік тому

    What kind of capital did you start with Henry?

  • @lucymwiti9302
    @lucymwiti9302 Рік тому

    How can i get the contact of The seller

    • @joefischer7615
      @joefischer7615 Рік тому

      Ok I can help you with the number how can I send it to you?

  • @ramsinhermez1722
    @ramsinhermez1722 Рік тому +1

    Will SPY ETF go down in the near future?

  • @KBBAKTHA
    @KBBAKTHA Рік тому +11

    this video lacks focus. You started with BABA but then jumped to AAPL chose $140 for long call paying $35.40 (break even is $175.40) but chose $167.50 for selling call and say 10 % return. suggesting a strike lower than break even in a tutorial is absurd. Then for no reason you jumped to PLTR, which you told me that wont fit into my portfolio. Sorry to point out but kindly be focussed and guide people. You have been very successful, there is no doubt. your tutorials should should be simple and focussed on the entire nuances of PMCC, than jumping from one example to another without elaborating on how a stock should be selected, why a particular strike and why covered call should be sold above break even point etc.

    • @dennisbbb
      @dennisbbb 7 днів тому +1

      Sorry to point out, but if a viewer cannot follow this simple tutorial, then managing options is just not right for him/her. 😂

  • @SmilingSynic
    @SmilingSynic Рік тому +4

    Selling covered calls is equivalent to selling puts. If one wants to limit one's risk, don't buy a LEAPS call just because you want to sell covered calls. Sell puts but use less leverage. Not necessarily cash-secured puts, but diversify one's portfolio and spread the risk around., or buy a put further out, so one has a lower risk bull put credit spread.

    • @J123G
      @J123G 6 місяців тому

      Agreed. Selling put spreads at a low delta is safer. Those long leaps sound good until the market goes into correction mode and you are basically loosing money with delta leap just as your would if you owned the shares. Then you're scrambling trying to recover your losses with more call sales.

  • @1Journeyone
    @1Journeyone Рік тому

    Great video. Really learned a lot about options trading...best ever! What platform are you using for your trades in this video. It look clean and simple. I like it! Thanks

  • @1Journeyone
    @1Journeyone Рік тому

    I see the title now! Answered my own question. Thanks again!

  • @gainsum
    @gainsum Рік тому +4

    I'm confused more now than when i was before this video.

  • @rick-vq8is
    @rick-vq8is Рік тому +2

    Buying the Jan 2024 $5 PLTR call and selling the Jun 2024 $9 call will leave you with a naked call after the Jan option expires and most brokers will not allow you to do this.
    This is probably the most confusing video you have done. Try holding on to a LEAP during a down or flat market and you will fear these.

  • @KoteOkarun
    @KoteOkarun 3 місяці тому

    How does this work though? Like as in do you need margin enabled and also lvl 3 trading on RH? Because they want you to take a test, and get to decide if you get access, thats wild to me. So if anyone knows if this can be done without level 3 let me know, because most likely they will deny my app and ill need to do 2 seperate trades

  • @UsernameOG0
    @UsernameOG0 Рік тому +1

    I'm trying to learn options, sometimes what you say makes great sense (thank you for these videos) other times I'm getting lost in this robinhood inception lmao.
    "okay ur gonna do poor man covered call, buy 1/5 of the stock, leap it out a year, now u sell cover calls 90% out of the money, now you collect robhinhood stock lending on the stocks u dont even own, now u collect dividends, now u collect interest lmao", all this sht on stock u dont own :D

  • @philochristos
    @philochristos 9 місяців тому

    The weird thing about a PMCC to me is that on the one hand, you'd want the stock to go up in price as quickly as possible so your long call goes up in value. But at the same time, you don't want it to go up too much or you'll either have to buy your short call back at a higher prices than you sold it or else get exercised. So it's like you want it to go up, but not too much. If it works as planned, then your long call won't go up in value all that much.

    • @Rey-yo6ts
      @Rey-yo6ts 9 місяців тому

      If you get buy a $300 call option at the $10 mark, and sell a $14 call for $50, the thing is, you get the $50 premium and if the stock goes up past $14, you lose out on potential gains, but if your short call is exercised, you make $150 instead of just $50. This is the right way to place your covered calls. Know the strike of your long call, how much it cost you, and add them together to know at what strike you can and can't sell a short call. If you sell the right calls, it doesn't matter if you're exercised or not, you're profitable. Only roll if you think it's going to continue going up and you want to extend/raise your short call (for a credit, avoid doing it for a loss).

  • @vikasgupta1828
    @vikasgupta1828 9 місяців тому

    Thanks

  • @00076Paint
    @00076Paint Рік тому

    You can roll one leg of the combo trade.

  • @tonynunez6539
    @tonynunez6539 Рік тому +2

    Sounds great for a professional with no job. Hard to learn and very time consuming for a high risk strategy.

  • @knm185
    @knm185 Рік тому

    What are all the Greek values that you need to enter a Poor Man's Covered Call?

    • @rivenhackney6203
      @rivenhackney6203 2 місяці тому

      your leaps should be deep in the money with a Delta of around .80 but you can go lower for more risk. personally .75 or higher is perfect. then when selling the covered call you want a short expiration date with a higher strike price and Delta around .20 or lower to protect yourself from losing money if assigned make sure the difference in strike price x 100 is greater then the premium you paid for the leaps call.

  • @durodesign1548
    @durodesign1548 7 місяців тому

    extremely confusing but thank you for the video

  • @halbouma6720
    @halbouma6720 Рік тому

    Thanks for the video!

  • @TheHighlycaff
    @TheHighlycaff Рік тому

    Maybe someone can answer this. I currently have a long call on CRWD, 3 options, expiring in January 2024. I am up on this position.
    My question is, can I use this position to sell a short term covered call option to generate premium?
    I am thinking of selling the 5/26 $140 at a strike of $5,50 (at the time of this writing). this would generate $1650 in premium.
    I am trying to confirm my understanding of what would happen on this trade given I am writing against a long position.
    If at expiration on 5/26, CRWD closes above the $140 strike, covered call, would get "called" - would my current January options act as the stock needed to cover? If so, I would also be able to realize appreciation on the long position (the Jan 115s) and it would simply get closed to cover the call.
    Trying to understand what the downside of my strategy here is. This seems like a good trade. Anyone?

    • @benjnse
      @benjnse Рік тому

      The downside to your plan is you are putting a cap on your reward. The upside is you can do it over and over again, assuming you don't get assigned, up till the Jan 2024 expiration of your long calls.
      But you should also know that the calls you sold do not have to be in the money for you to get assigned. In general you won't be assigned unless that is the case, but options are legally binding contracts that do not specify anything about where the stock price has to be to exercise them. And just because it doesn't seem like a rational decision to exercise an out of the money option, does not mean that there isn't one. Off the top of my head the option that you sold may have been bought to define the risk for another trade that actually did go in the money so now they need to exercise on something that is out of the money. Or exercised for any number of reasons.
      Bottom line is as long as you're comfortable with the options you sell potentially being exercised at x strike price and are happy with the premium received then go for it.

  • @pengu6716
    @pengu6716 Рік тому

    Hey i tried getting level 3 options on Robinhood and it wouldn’t let me do these complex trades. Is there a way to do anything with just calls and puts? Let me know if you know how long it takes to get approved. I’ve been trading for 3 months.

    • @cya3783
      @cya3783 Рік тому +1

      U need to change ur own preferences/ ur risk tolerance in RH setting , once u do that u can instantly go upgrade there is no wait time for any approval

    • @5pecialFX
      @5pecialFX Рік тому +1

      Stick to mostly shares and sell ccs.

    • @pengu6716
      @pengu6716 Рік тому

      @@cya3783 thanks!

    • @pengu6716
      @pengu6716 Рік тому

      @@5pecialFX thank you!

    • @mgp1276
      @mgp1276 Рік тому

      need to reapply, possible change your setting as high risk management ability

  • @rick-vq8is
    @rick-vq8is Рік тому

    If you are doing a trade for $0.06/week of income, you may need to evaluate why you are trading. Maybe you just need to paper trade this strategy and not take on any risk.

  • @Gafizal1
    @Gafizal1 5 місяців тому

    Please make a video on how to successfully unlock level 3 options trading on Robinhood! We do not all seem to have the ability to creat multi-legged spreads nor iron condors/ butterflies, as you demonstrate in your vids. Thanks!

  • @MarianBoricean
    @MarianBoricean 8 місяців тому

    It's a "LEAPS" not a "LEAP" :)
    The last "S" is not for plural.

  • @Dr77Funkenstein
    @Dr77Funkenstein 10 місяців тому

    I love these videos and I like the fact this guy went to Drexel.
    But these strategies are only good in a bull market. The problem is the market has been in a bull market for basically 11 years now. Which is way over done historically.
    Bear market will crush these strategies

  • @5pecialFX
    @5pecialFX Рік тому +1

    Jan 2024 is 9 months till expiration, not a leap. And in this market doing that you can get boofed. Aapl stock is not going up in the near future. That is absolutely risky Jan 2024 itm call’s especially with aapl after this run up too.

    • @coltonviner
      @coltonviner Рік тому +3

      Looks like the PLTR portion was filmed in June of 2022. He has been posting old videos he has already done recently

    • @blessed8543
      @blessed8543 Рік тому +1

      This aged well with very bullish apple

  • @shill1103
    @shill1103 Рік тому +1

    Henry you are up 6% ytd. Spy is up 7% ytd. I demand answers big daddy!!!!!

    • @InvestwithHenry
      @InvestwithHenry  Рік тому

      That's not right. I'm up 10% and I say that in the video with proof.

    • @InvestwithHenry
      @InvestwithHenry  Рік тому +1

      6% was because it was from Febuary clip I added for one of the examples

    • @shill1103
      @shill1103 Рік тому +2

      @@InvestwithHenry haha I’m just messing with you. I know you know what your doing. Thank you again for everything you have taught me!

  • @latishaeverett1089
    @latishaeverett1089 Рік тому +1

    Good video

  • @cbro777
    @cbro777 7 місяців тому

    3:44

  • @sharesuccess7849
    @sharesuccess7849 Рік тому +2

    Getting Rich quick is the Quickest Way to Bankruptsy

  • @midwestcannabis
    @midwestcannabis 7 місяців тому

    🎉

  • @StockOption
    @StockOption Рік тому

    i need you to mentor me! please

    • @InvestwithHenry
      @InvestwithHenry  Рік тому

      Sure link in description there is free training and you can schedule a call

  • @coreytaylor1673
    @coreytaylor1673 Рік тому +1

    LEAPS 🤦‍♂️

  • @SpeakTheTruthSTT
    @SpeakTheTruthSTT 2 місяці тому

    I swear if you say pbe more time poor mans cover i am gonna lose it !!!!

  • @sharesuccess7849
    @sharesuccess7849 Рік тому

    Show me the Money.....Lol

  • @scottbess4200
    @scottbess4200 Рік тому

    What portfolio size is needed to obtain $5k in cash flow per month?

    • @TheMattyg73
      @TheMattyg73 Рік тому +2

      Depends. Are you looking to obtain truly passive income from something like dividends? Or are you wanting to be a day trader, and use various strategies to collect premium from options?
      If you want a "set it and forget it" approach of passive income (dividends), then a well diversified portfolio with an average to high(ish) yield of 4% would require $1.5 million portfolio size to hit to $5,000/mo mark.

  • @jamesjacob6841
    @jamesjacob6841 Рік тому

    to much management, and risky.

  • @Chris-vz2kv
    @Chris-vz2kv Рік тому +3

    You never show yourself actually making the 500% from these butterflies tho.? Awful

  • @darkavenger100
    @darkavenger100 Рік тому

    Henry, I'm not here for advice on options or fitness. I'm actually here to learn how I can meet a high-quality woman. A guy like you must have options when it comes to the dating market, so please share the secret. I'm sure working for Goldman Sachs, having big arms, and being a UA-cam celebrity must help, but how can a mere mortal like me win the favor of a fair maiden?

    • @InvestwithHenry
      @InvestwithHenry  Рік тому

      Just be in shape, work on humor and confidence and you should be fine. I have a gf so I don't really go out on the dating market too much.

    • @darkavenger100
      @darkavenger100 Рік тому

      @@InvestwithHenry Do I need to know martial arts and be handy? And is it okay to use incline bench or iron condor humor to break the ice?