Good job of explaining something that is not that easy to explain to newbys. I sometimes like selling deep in the money covered calls to get time premium when the stock or ETF is expected to go down and if it does I can buy it back at a profit when the stock can be expected to go up. A way to make money on time decay. Selling cash secured puts can have it's place too.
Yes there are many variations on the covered call and cash secured puts themes. Incidentally, on our workshop we go over an extensive example of a cash secured put if you are interested in attending: here's where to register: smbu.com/seth
Another great video Seth! How do you calculate/manage your risk for this strategy? I.e if there is a positive news catalyst behind the stock which sends it much higher than the call strike price, how do you control your losses? Thanks in advance, love your videos!
Henry, you don't really have losses in those situations. Your shares just get called at that point. You still keep the call premium. and you've made a killing on the underlying shares and overall the trade would be a strong winner.
Thanks for the reply! So if the stock rises to the strike price, you still get the ~ 10% gain, with the only downside being that you are forced to sell to cover the call before it rises further? Seems like a fantastic strategy with not a lot of downside at all!
Good job of explaining something that is not that easy to explain to newbys. I sometimes like selling deep in the money covered calls to get time premium when the stock or ETF is expected to go down and if it does I can buy it back at a profit when the stock can be expected to go up. A way to make money on time decay. Selling cash secured puts can have it's place too.
Yes there are many variations on the covered call and cash secured puts themes. Incidentally, on our workshop we go over an extensive example of a cash secured put if you are interested in attending: here's where to register: smbu.com/seth
Thank you for explaining such a difficult subject in such a simple manner!
Our pleasure Julia. Let us know of any other options topics you'd like us to cover!
Another great video Seth! How do you calculate/manage your risk for this strategy? I.e if there is a positive news catalyst behind the stock which sends it much higher than the call strike price, how do you control your losses? Thanks in advance, love your videos!
Henry, you don't really have losses in those situations. Your shares just get called at that point. You still keep the call premium. and you've made a killing on the underlying shares and overall the trade would be a strong winner.
Thanks for the reply! So if the stock rises to the strike price, you still get the ~ 10% gain, with the only downside being that you are forced to sell to cover the call before it rises further? Seems like a fantastic strategy with not a lot of downside at all!
What would you guys say is more efficient in terms of Technical Analysis? Futures or Stocks? Thanks
Another great video
How about doing it weeklies can make money each week. Without the risk of a whole month of price going thru to the moon