The $59k profit is actually gross profit, which means commissions and other fees weren’t factored in, which in turn means that he must have deposited more than just $52k into his TOS trading account. Still, his returns are impressive.
Master, what do you think about Omicron, new covid variant related to market sell off Friday? Hangseng is so low , will it break march 2020 low?please ..
Hi, thanks for sharing this. But on the diagonal spread, how is the 40% return in 2weeks calculated? You pay $22, but only get back $1.5x 6rounds = $9 only
Hi , thanks a lot for sharing your strategy! Do you buy this as 1 strategy? How can you sell more calls when the first short-call is expired (if it's a combo)? If the short-call is expiring worthless, you sell another call with still the same underlying price or do you adjust?
This is not covered call. The 3 month call option will yield rent only till the market is above it's strike price. If the market goes down more than 1 SD he may have to sell the 2 weeks call below the 3 month call and then it if you think about it , you will figure it out that the spread is unsustainable within risk parameters.
yeah, but the point is that he has exit rules that he exits when the stock drops 10% or rises 10% (or roll over if not exiting), so it's okay to trade with Square. Adam wouldn't recommend Square for the long term investment, but it's a okay or good enough company to trade with exit rules.
This is good, thanks for sharing. For Leo, what percentage of your profit is from the credit of the short leg vs the appreciation on long call? Wondering whether it makes sense to cap the upside this way, from what I see you get about: 6 cycles x +150$ (2 weeks) vs -2215$ cost of long call (3 months = 12 weeks) = net debit of -1315$ assuming you keep all the credit Which means you get about 900/2215 = 40.6% from the short legs vs cost of the long call. Compared to holding the long call for the long shot (>50 to >100% profit on capital). Ofc, probably stocks that were going down don't tend to reverse immediately, so maybe this short-term bearish mid-term bullish outlook might make sense.
I must be missing something. If he's collecting roughly 1.50 in premium every 2 weeks. He making roughly 3.00 every month. Which multiplied by 3 is about 9.00 in collected premiums. How does he make money if his premiums collected are lower then the long-term call option he purchased initially?
The long-term call option increases value over time if the stock price goes up, so when he closes the trade (i.e. the long-term call option), he can sell it at higher price than the price when he purchased it.
He will lose money on that long call still, if the underlying doesn't appreciate enough. The loss on long call is slightly offset by credit collected on short calls. So this strategy is a slightly bullish one, less bullish than outright buying long calls alone.
A Poor Man's Covered Call. What does he do if the price of the stock goes down? Does he renew the covered call at the end of 2 weeks at the same 1 std dev amount?
ADAM, PLEASE REPLY ABOUT BABA ASAP. Look how many people asking you about it...Its not honest to just not reply if so many asking you about BABA. Its fallinglike a rock and many hold positions....PLEASE RPELY ASAP. Thanks
who doubbled??? There loses all over !!! You did not replied what to do with BABA ???? Its falling down as a rock and you was extremely happy you got shares for 200$... Did you sokd them??? PLEASE ANSWER ABOUT IT. PLEASE
Adam, you were born to teach. I have watched many other tutors but without a doubt, you are the best!! Keep flooding us with great content.
I like this kid, he seems like a really smart focused humble guy
Hi Adam and Leo, are you referring to Poor Man Covered Call strategy
I love this man...the structure the detail and the organization..the trading journal made in heaven
Hello Teacher Adam, May I know in which course this particular trading strategy is taught?
The $59k profit is actually gross profit, which means commissions and other fees weren’t factored in, which in turn means that he must have deposited more than just $52k into his TOS trading account. Still, his returns are impressive.
This is gold! Thanks for this valuable video!
Interesting. I'm starting my journey into investing and trading. This is inspiring.
So how is ur portfolio looking like now, after the december january draw down? Do u mind sharing?
Any suggestions for stocks to buy long term at these discounted rates ?
Master, what do you think about Omicron, new covid variant related to market sell off Friday? Hangseng is so low , will it break march 2020 low?please ..
Selling weekly option at one sigma at low IV, the premium is very little, correct me if I m wrong
Hi, thanks for sharing this. But on the diagonal spread, how is the 40% return in 2weeks calculated? You pay $22, but only get back $1.5x 6rounds = $9 only
Where can we find this guy's Scanner he talks about?
I want to fast learn all about stocks market and trading and i found this channel helps a lot thanks Master Adam👍🏻👍🏻
Since you made this video, SQ has dropped > 50%. What came of this diagonal spread?? Did he exit? "Ride it out"??? How did this story end?? Thanks.
Adam we want replay of black market event...
Hi , thanks a lot for sharing your strategy!
Do you buy this as 1 strategy? How can you sell more calls when the first short-call is expired (if it's a combo)? If the short-call is expiring worthless, you sell another call with still the same underlying price or do you adjust?
This is not covered call. The 3 month call option will yield rent only till the market is above it's strike price.
If the market goes down more than 1 SD he may have to sell the 2 weeks call below the 3 month call and then it if you think about it , you will figure it out that the spread is unsustainable within risk parameters.
THANKS BOTH!
Funny how Adam used to say Square is an over valued company but using it as an example for good company now.
yeah, but the point is that he has exit rules that he exits when the stock drops 10% or rises 10% (or roll over if not exiting), so it's okay to trade with Square. Adam wouldn't recommend Square for the long term investment, but it's a okay or good enough company to trade with exit rules.
Good companies can be overvalued he just wait until price correct itself and then he buys it.
SQ down huge rn
To be fair it’s his guest’s example NOT Adam’s
🤦♂️ it’s not Adam’s trade.
Best Channel. Thank you Adam.
This is awesome thanks for sharing!
Which course are you talking about throughout the video?
Nice trading strategy video. Can I receive the Options Trading Journal Spreadsheet? Great way of record keeping.
Yes please address the concerns of Baba being delisted and also how would it affect 9988 in HK
Great Video With Powerful Information 🤑
This is good, thanks for sharing. For Leo, what percentage of your profit is from the credit of the short leg vs the appreciation on long call? Wondering whether it makes sense to cap the upside this way, from what I see you get about:
6 cycles x +150$ (2 weeks)
vs -2215$ cost of long call (3 months = 12 weeks)
= net debit of -1315$ assuming you keep all the credit
Which means you get about 900/2215 = 40.6% from the short legs vs cost of the long call.
Compared to holding the long call for the long shot (>50 to >100% profit on capital). Ofc, probably stocks that were going down don't tend to reverse immediately, so maybe this short-term bearish mid-term bullish outlook might make sense.
it took me few days to click the first option trade as lack of confident...
This strategy is actually called PMCC - Poor man's covered call. Great interview though!
Yes, from tasty trade. Nevertheless, detailed explanation.
*Loves your videos*
I must be missing something. If he's collecting roughly 1.50 in premium every 2 weeks. He making roughly 3.00 every month. Which multiplied by 3 is about 9.00 in collected premiums. How does he make money if his premiums collected are lower then the long-term call option he purchased initially?
If the underlying goes up you forgot he is buying a call
He sells the long call he purchased when closing out the trade, it doesn’t just go to zero.
He closes out the call he bought also
The long-term call option increases value over time if the stock price goes up, so when he closes the trade (i.e. the long-term call option), he can sell it at higher price than the price when he purchased it.
He will lose money on that long call still, if the underlying doesn't appreciate enough. The loss on long call is slightly offset by credit collected on short calls. So this strategy is a slightly bullish one, less bullish than outright buying long calls alone.
WHICH PLATFORM IS THAT ??
TD Ameritrade
Max exposure 80% NLV too high. DS is high prob. strategy so RR should be way higher.
A Poor Man's Covered Call. What does he do if the price of the stock goes down? Does he renew the covered call at the end of 2 weeks at the same 1 std dev amount?
I think he closes the whole trade with %50 of the max loss
Thanks 😊
how baba??
Wow that’s great
i still prefer BPS. Gotta be more disciplined
Max exposure 80% too high.
Baba buy?
SQ went down to 212
So he lost the trade and Both the legs. Sq was not good pick for the strategy.
Wouldn't it be easier to just buy the stocks and keep selling Covered Calls on solid companies?
Requires too much capital
One benefit of owning stocks is that you can collect dividends assuming the stock offers it.
ADAM, PLEASE REPLY ABOUT BABA ASAP. Look how many people asking you about it...Its not honest to just not reply if so many asking you about BABA. Its fallinglike a rock and many hold positions....PLEASE RPELY ASAP. Thanks
The man himself 😆😆😆
how is ur baba?
How does this strategy compare to poor mans covered call?
This is the same
This is actually that. Poor man's covered call.
Diagonal Spread is the Wall Street’s term.
who doubbled??? There loses all over !!! You did not replied what to do with BABA ????
Its falling down as a rock and you was extremely happy you got shares for 200$... Did you sokd them??? PLEASE ANSWER ABOUT IT. PLEASE
Dollar Cost Averaging
Cool guy