How to trade Covered Calls l Generate Income FAST l Options Trading
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#maximizeincome #consistentincome #coveredcalls
Tony is an excellent teacher! He doesn't feed you all the hyped-up BS you get from others on TH-cam.
Hey my hyped up ilus is up almost 100% and I got into that recently.
The problem with this guy is he starts off by saying every investor should be doing covered calls.
I only have $1,000 in the stock market. Until I list goes from 8 cents to $5 it probably won't be out of the OTC market which is doable they are running up and they are retiring shares instead of doing a reverse split and then they are going to probably spin off a company to reduce the share count even more.
So my 8 cent position could easily go up to quite a bit but it's going to need to get up to $5 to hit the NASDAQ and quite frankly by the time it gets out of the OTC market I will have liquidated quite a bit. That's 100x to $4
If I were to put everything into one stock I wouldn't be able to do many covered calls so this really doesn't help me super much.
Also with the Delta variant the stock market is going to be shifting quite dramatically in calls are very bad idea.
If anything you should be buying high conviction undervalued plays that you think will thrive for the holiday season because of the dark winter remember that summer is the hottest months and that's when the virus has the hardest time doing anything.
It's going to devastate us around October and by January I think it'll have been so bad that we're going to hit herd immunity even if vaccination rates stay stagnant. But the concern of long covet is really going to start devastating the workforce if we don't get our s*** together soon.
On top of that you only have maybe a month and some change for the eviction moratorium so people are still building up back rent and we've only given out maybe 5 to 8% of the $44 billion some of which is a carryover from last year which is going to devastate rental stocks.
On top of that there's no talk about stimulus the Republicans are very anti-government spending and would not be likely to do the spending bills that we need done until it's too late and the stock market hates spending bills and goes bonkers with all this talk.
I'm sure calls are a great thing if you time it correctly they can be amazingly profitable but for us poor investors with this much FUD new investors should probably not be touching covered calls right now.
Liquidate low conviction stocks and by the dips on high conviction stocks and hopefully next year the confidence in calls will be better right now we should not be reaching market all-time highs with several massive short squeezes going on the people struggling the hospital is filling up.
Any of these things could cause a spiral of a reversal trend not to mention if AMC does start to go up to 50 and $60 or GameStop does start to go up to 300 400 500 again we will see massive massive issues.
I'm actually primarily focused right now on stuff that squoze in January and still has potential to squeeze again. I'm actually using Robin Hood's share restricted list and then I take the lowest market caps and the total value of dollars that you can put into it on their platform as a gauge of how risky it is for citadel and other market makers and hedge funds because I think that those are the ones that are most likely to quadruple.
I won't be putting a lot of money into these but if I can double or quadruple the money I put in a hundred here 200 there, I can build investment Capital to put into more high conviction plays and even if they just go up 10 20% it's not a lot of money sure but you do that over and over again swinging the bottoms and waiting for squeezes I can accumulate.
Thanks!
Oh I love what you do I so wish you had your own show on CNBC I always look forward to Friday when you’re on thank you
Thank you for all of your support!
You are so awesome! Thank you for the concent! I shared this with all of my apes!
Thank you so much!
please don't, covered calls are a terrible idea, they will take your profits whent the price goes up. Buy and hold and trap shorts, keep it simple my fellow ape
Much appreciated, thanks Mr. Zhang! Especially, those back tested magic numbers are golden; so generous of you to share...
Best option lecture That I found in the TH-cam! Thank you!
Thanks for watching!
, covered calls are a terrible idea, they will take your profits whent the price goes up. Buy and hold and trap shorts, keep it simple my fellow ape
This was great - watching it a second time. A+
Thank you so much!
Excellent explanation! Thanks
My pleasure!
Very well explained !! im an experienced trader but still learned from your teaching...well done and keep up the good work
Awesome video, thanks Tony! I like the list of stocks at the 30 min mark to select stocks to sell calls against, and the advice on management of covered calls.
Your videos are very informative. Thanks for taking the time to make them.
My pleasure, thank you for watching!
Make sure to download my FREE technical analysis guide 👇👇👇
www.optionsplay.com/free-technical-analysis-report?Video&TH-cam&TH-cam%20TA
Very well explained. You sir are very knowledgeable. I wish I would have known this when i was in my early twenties. At least now i can teach my kids about this awesome investment tool.
Thanks for your support!
Wow I learned a lot Tony…glad I found this video.
Happy to hear that!
best option learning video. Excellent educator
Thanks!
Great stuff. I watch several youtube videos on how to trade in the stock market but haven't made any headstart because they are either talking some gibberish or sharing their story of how they made it and I do not want to make mistakes by taking risks in my own hands.
@@justinclynes481 hi, no I haven't do you know any or can you point me in the right direction?
Thanks for sharing, but have you made any profit whatsoever?
hey thanks for sharing, I just looked her up found her website and left a message, hope she replies soon. I really want to make some profit of this.
Amelia babasa wood is a professional. I have came across her website she’s good
@@anthonyszymon3032 ha ha ha ha ha
wait 2 weeks before rolling a covered call... more great advice. i like your info
Subscribed. Thank you.
Thank you!
You are the best BRO...
55:27 Thanks for talking to the emotion about FOMO. I don't have it anymore. Your educational videos have helped with that tremendously.
, covered calls are a terrible idea, they will take your profits whent the price goes up. Buy and hold and trap shorts, keep it simple my fellow ape
What a helpful video. Now I see what my mistakes are when I write cover calls.
Glad you found this video helpful!
Hi! I love your videos!! Thanks for making them. I was a bit confused, though. I thought you were shooting for a delta of about 10-15 for the OTM strike price but the report you showed is a 20 delta report. Did I miss something?
Awesome. Made me a member and made me money today selling C.C.
Good information for investor. Thanks for sharing
My pleasure!
thank you
Thanks I learned a lot about how to trade options
Glad to hear that!
Long awaited. Thank you.
You're welcome!
Tony you really are great thanks. You made me a member.
Thank you so much Dan!
Just wanna jump in and say u did a great presentation. Good job
Thank you so much!
I don't recall if you mentioned this; but what is the likelihood that a covered call writer cannot simply re-purchase the same assigned $tock within a 5% price increase from the strike price then immediately sell a new covered call (with lower delta) to significantly reduce that gap?
Thanks :)
My pleasure!
Awesome kudos 👏
Thanks Lawear!
, covered calls are a terrible idea, they will take your profits whent the price goes up. Buy and hold and trap shorts, keep it simple my fellow ape
Thanks, very good instructional. I still have questions about the functional process however. What happens if I sell a call and it gets excersized? I must deliver the shares I sold the call for, I get that part. But, how and when do I deliver. Do they only get exercised between 8-5 M-F? Do I have to be sitting at the computer all the time waiting just in case it reaches the strike price? Or is it all automated like I suspect it is?
Good teaching
great !
Thanks Jerry!
Hi Tony, I normally sell weeklies (no more than 2-3 weeks) because I feel anything longer than that exposes you to more risk. Is the 45 days optimal expiration geared towards less volatile stocks? Thanks!
Thanks 🙏
No problem!
1 - have done a number of Covered calls backed by one or more blocks of underlying stocks
Hey Tony! You recommend a 0.15 Delta for selling covered calls but your reports are based on 0.20 Delta. Which is right? Is there a range? Tnx!
Hi Tony, great video! Quick question, if the stock rallies up to my strike price - should I take profit and buy to close but only 2 weeks prior to expiration if I don't roll?
i loved this - there is a guy called 'option alpha' who does not adjust the side being breeched, he rolls the put options, therby creding more credit and increasing the BE. something like that.the 15 delta is perfect for taking profit before the 'greed and fear' sets in and you loose it again.
On the question on sorting the Covered calls and Short Puts spreadsheets. It is easy to do. Just copy and paste on your computer excel spreadsheet and you can sort it many different ways.
When did the price of the yearly membership go up ? it was $500 just not to long ago. Was hoping to buy a membership :(
Do you have a video on how to write covered calls options on indexes like QQQ or SPY?
The reports that get released
Can we download them
You talk about using Delta between 10 -15 mostly and yet the Covered Call list you show from your website uses Delta 20.. ?
What if I sell at the Money call on the SPY weekly and keep on doing it forver. If it goes up, I buy the call back and sell the following week's at the Money call? Thanks,
Tony, in TradeStation and Fidelity the delta is expressed as decimals 0.15, 0.26..etc… is that the same as a 15 and 26 delta
Yes, those 0.16 is a 16 Delta.
Does it cover tencent meituan baba sea FUTu tiger u covered call or put reports
So I realize this is for education only. But I really liked Seagare good dividend and a tech stock so I bought some. It went up $10 just today. Hahahahaha Thanks.
And?
Tony, one more question, is it not better to sell covered calls when IV Rank is high?
yes it is but its high for a reason, it can turn against you.
That was a mistake I made when I started. Chased high IV. Buying in and getting inflated premium. But the IV is almost always spiked high for a reason. By the time the call expires, what ever caused the spike has passed and now you are holding shares that are down 30% plus. The silver lining is that you can keep selling calls till you cover that loss. At lower premiums of course and most likely a couple months till you break even. It's better to be holding a good stock that experiences an IV spike than it is to buy a stock because it is currently experiencing a spike.
If I become a member is there paper trading where I can practice on u system or have I got to do it on my broker platform
It is usually best to learn using your broker’s platform to get familiar with their interface and margin requirements, which vary greatly.
Note paper trading won’t mirror real world trading, as trades that won’t be filled on exchanges will trigger in the paper account.
Yep will do that for a while with my RKT puts I got assigned on today
p
q
@@gianluca1971100 mind your P's and Q's
Is there a way to legally write off your membership fee?
what is this marking software you're using?
If you need income, it's pretty hard to know when to repeatedly buy and sell a good stock. So when my objective is to make maximum income, I write covered calls weekly on a hot stock that I don't mind owning where I make over 2% per week. If it goes down, then I'm glad I at least took the premium. If it floats level or goes up, then I have to be happy with 100%+ annualized returns. When the right stock gives a
Hindsight is the only true actualizer. It all just depends what the underlying ends up actually doing man, at the end of the day. All we can do is make the best assumption. If we had fool proof conviction regarding the underlying’s movement, then everyone would just write the perfect terms each & every time; and rolling out/up wouldn’t even be a part of the conversation at that point
Hi Tony, what if you aren't a buy and holder? All you want to do is write CCs and take premiums. So the question is then, how do you select an underlying stock that is giving good premiums, and lower the risk of that stock tanking? Maybe the poor man's covered call is the answer? But the PMCC scares me under the circumstance when the stock gets called away. I don't fully understand how that works.
Stocks with good premiums are the ones with volatility. You want the gain without the risk! The type of stock this is best with are the flat trading stocks with high dividends. But they don't have huge premiums. That's where the dividends come in.
What if the price shoots up suddenly like it happens in the case of stocks like FB, AAPL, SPCE, TSLA, etc.? Should you sell stocks at strike price or do a rollover?
Rollover is just a new position... just take your profit and decide on a new position. ...
@@BALLYRM it is a loss and not profit
thats the real issue. it hampers your ability to trade the stock. not for stocks with possibilities of big gaps. ok for boring go no where stocks...if you wnat to even bother with them
I think those of us who have smaller accounts would be interested in a calendar spread report.
Looking for where delta is listed.
"there's no time decay on ITM covered calls" with this comment Zhang shows he needs an introduction to options. A call at any expiration and strike has the same time decay whether you buy it or sell it. It is not different because you sold it as a covered call.
The deeper in the money any contract is (higher the delta), the less “time decay” will affect its value premium value. That’s because more of its premium value will be made up of intrinsic value. If it’s a .99-1 delta for example (pretty extreme example); you’d still have pretty much most of your equity intact even if the underlying traded flat the whole time, and even if it went against you by a slight amount.
U r kidding right? This man is like the king of option.
My problem is most of the stocks which I have purchased 100 shares are lower than my buy price. I made money in CC for about 2 times, now the current price is low and a CC will be lower than the price I purchased. how do you handle that
You have to keep track of your cost basis if the stock cost you 90 and you made 10 after 3 trades your new cost basis is 80 so you can sell calls that at 80 or above.
Recall that this is the same risk as just owning any stock. This is why dividend stocks are great; you get paid to hold them (even while they are underwater).
Some stocks are quite expensive for having 100 of them. Can you explain how to sell call spreads against less than 100 stocks. And how to manage them
His channel has debit & credit spread videos and how to manage them, posted within the past 8 weeks.
Right this strategy is for more advanced traders with more capital most regular ppl do not have 10 to 15k or more to front for 100 stocks and the option it is better to start off with regular buying and selling options then to get into this strategy without much capital
Tony, as always excellent tutorial, thank you. Do you think we can use Covered Call spreadsheet for poor man's covered call strategy?
, covered calls are a terrible idea, they will take your profits whent the price goes up. Buy and hold and trap shorts, keep it simple my fellow ape
@iBuiltA why not find a stock you love and believe in that's heavily shorted, stick with it and sqeeuze out shorts instead of hoping for a stock to stay flat and get tiny profits, and lose out when volatility happens (likely in this market)
I have traded covered C's..Jim Bowers
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If rolling up or down , the premium is debit, still worth to rolling it to save the trade?
it can be, rolling is just closing and opening.
Hello. If my stock/etf has monthly options, why do 45 days? Would mean I sit idle for two weeks every time I reach the end of one option expiry ..
3
Don’t know what it is. Want to learn
Professor Zhang laying down the big knowledge.
What do you mean roll your covered call?
At what time in the future do you usually let your calls expire? Is it 1 week, 2 weeks or more?
@iBuiltA Ye I found it after I commented
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1
That's all great. But what about the most important factor: How and when to get out?
you get out when you want, noone can answer that for you.
A personal decision.
A covered call does have some risk, limited but not negligible. When the underlying security price causes the call to be "in the money", and rises above the break-even point (that's strike price plus premium), it is preferable to get out, especially if the underlying stock appears poised to keep going up past the break-even point. When the call is in the money, any increase in the stock value is offset by the decrease in value of the call. At that point, I buy the call back, especially if I am getting close to the expiry date.
@@pierrec1590 Right. But... Consider the opposite scenario. When the stock tanks, you need to jump overboard fast. Yet, you're stuck with the position because the loser stock is securing the short call. So, you're forced to buy back the short call. It may be cheap. But it might not be proportionately cheap So, you may end up giving back a lot of premium while you take a ride.
@@davidchristie3245 When that happened to me, I bought back the calls, and then sold the stock. Glad I did because I would have lost thousands the next day.
Owning a good chunk of TSLA makes me nervous selling CC's on them 45 days out due to Tesla's wild swings plus Tesla is so news driven. Selling less than 31 days out makes them unqualified and resets the holding period as I understand it. Seems like TSLA is a unique animal for selling CC's.
True, I've had my TSLA shares called away on a run up, but they always seem to come back down for repurchase. TSLA is probably not the type of stock to do this with, unless you follow it very closely. Although I did sell a 990 call on them last week that obviously paid off.
How do you calculate delta?
Change in price of asset ( call) divided by change in underlying asset ( stock)
Is writing covered calls options on indexes like SPY or QQQ the safest, risky free and earn income for life even in a long bull market? Options is a form of derivatives
I have a lucky with covered call than selling put
Do you choose to do this when the VIX is high because premium is up? Why not sell covered calls when the stock is reaching resistance?
@UCan9-RbRNv60GVQ5sLz6I7A I have a 100% win rate. I am in and out of the markets when the time is right. Took years to establish a 100% win rate; it wasn’t always like that.
@iBuiltA it’s possible. But you’ll have to pay tuition.
@iBuiltA you my friend must have not figured it out yet. Give me any ticker and I’ll manage it good enough to take the W when it presents itself. It takes 5-10 years of risk management to finesse the way I do. Have a good day sir.
100% win rate by managing. Not “going all in” silly.
@iBuiltA You my friend have not figured it out yet. Just by your lack of frustration. Relax and go make some money!
I don’t know how on Merrill
Dont let losing trades taint the new winning opportunities right in front of you.
yes I've sold lots
This might be a dumb question, But why would someone pay a premium to buy 100 shares thru an option when they can buy those same 100 shares on the market without a premium??
The person buying your call option is essentially renting the 100 shares from you through the options contract. They get to be long implied volatility and the price of an option goes up non-linearly as the stock price ascends so they are basically using it as an analog to leverage in their portfolio. Many people also use call options because the capital requirements are lower than purchasing the shares outright.
@@drxkalishnakov2464 Appreciate the clarification. Thank You!
If a stock doesn't have a 15 delta, but has 20 delta and 10 delta, which would be better?
@iBuiltA thanks!
It is risky because if the stock crashes, you can't put a stop limit because you have to close covered call positions first. If the stock keeps going down, the premium you make from selling covered call can not make up for the loss, and if you hold the stock until the stock recovers, there's a potential that your stocks get called away and you lose the chance to break even.
thats why you choose stable stocks.
@@no9254me How do you define a stable stock? It is stable until it is not.
@@babycutezz5665 check the beta. Usually dividend stocks sacrifice growth. Yes you are correct past performance blah blAh blah
I sold call on stock I owned but stock went further up my strike and I was called away but if I had kept stock not sold call I would have made more profit
But the point of this type of trade is realized income, not unrealized stock gains. Ideally you'd have your buy and hold portfolio with growth stocks and your covered call portfolio with value stocks for income that don't have wild swings. If you have a small account, maybe focus on the former before you start the latter.
@@uclajd thanks do u have trial membership and does it shows when what stock sell put or call I like simple strategy calenders and straddle or butterfly seem complicated and high risk and does this complicated strategy had more return?
@@uclajd do u think is it worth get 30 yrs loan SBA gives me for 3.75 rate and invest in stock market indexes or ETFs?
@@edwinbab705 Depends on the stock! And I think that is illegal, better run it by your accountant. Could be fraud. I do know people who have taken home equity loans to invest. But I fear we are headed for a bear market until the Fed stops the beatings!
Great video, except it's completely wrong. How many times does he use the word "if" when looking at those three strikes? Yes, IF the stock goes to 100 you make out, big time. The flaw is that he doesn't apply the probability (delta) through to the maximum gain (stock appreciation plus the premium) in order to make concise mathematical comparisons. For each strike, add the max gain to the premium and then multiply by the probability. For the 100 strike, gain of $12 (using a stock price of $88 for each, not $88.61) plus the premium of .75 multiplied by the delta of .15 comes to 1.91. Do the same for each strike. The 97.5 strike comes in at 2.64 and the the 95 strike at 2.55 with the 100 strike dead last at 1.91. If the only thing that matters is a large gain on the stock then why not write the call at 105 or 110? When everything became about posting videos, the value of the content cratered.
S
Well, this should be just ATM only. LOLOLOLLL
For the ITM, I don't think so for the seller can make.
Also takes need to pay the first year high tax.
LOLOLOLLL
i sent an email to options play as to what services you provide. no answer.........
Why does the Optimal Covered Call Report include crap we are not interested in like stocks that are not liquid
Don't understand
Thanks to grandpa Joe everything reeks inflation, good thing is people are getting to know cash/fiat is pretty much stone age at this point, it is designated to fail eventually, 3 BEST and surprisingly easy ways to double or hold your funds in 2021; Real Estate, Gold, Who can guess the 3rd??
Obviously Stocks, I’m a child psychologist who hasn’t worked since December of last year, which made me start looking for passive income, I finally reached out to an advisor for help, following her recommendations, I dumped 30k all in NIO and NVDA shares and call options, Up 200k so far!!! this has literally been a life saver.
@@jenbynature780
I worked with Ashley Elizabeth Alson, She's been in the news when she revived Preemark company in 2019, met her at an annual fundraiser in Boston. You can look her up on the web for info on her work
@@mitchel8329
Wish I could say I can relate but I cant, Ashley 's charge is one time only and very much reasonable when compared to what I benefit from her expertise
@@cupcakekaren7208
lockdown could have been lifted earlier
Crypto! 😀😀
Never
Not enough knowledge
If you need 100 stocks for a covered call then its not the best strategy for beginners who don't have 10k or more for the stocks and the option so next
are you a beginner?
@@jeremyt820 Yes but unlike alot of these youtubers I actually read books on the subject buy options trading for dummies covered calls is a form of hedging it does minimize risk but you will need alot of capital in order to do that and also what he didn't mention is you will need a margin account to trade covered calls with TD ameritrade it is required to have at least 2k google it or ask them if you dont believe me. Another issue with what he is saying to do covered calls you need 100 shares of the stock the option is bought separately most beginners do not have that kind of money which is why I say it is a more advanced strategy for people who have it like that.. You can do this and make money if you read up on probability charting understand the Greeks and how they work I suggest getting your information from reading textbooks and going on the tdameritrade site and utilizing their educational guides so your not led astray alot of these youtubers count on you to be confused so you can buy their courses. I dont recommend anyone who is a beginner using a margin anything because all it is is a loan from the broker so you can trade why borrow money from them just use your own money and when your really good at it if you want to use a margin its your life.
Covered calls are a great way to prevent yourself from making significant returns
Customer Service Dept at Options Play is a Joke ....Big ripoff
UGH. You had me until you started randomly picking stocks based on price and liquidity. FALSE! Good lord you are encouraging people to buy stocks with zero fundamental analysis?! Your followers will be owning stocks and they don't even know what the company does, whether it is profitable, let alone what analysts think about it! A travesty. NEVER EVER own a stock that you don't know anything about! Zoom is currently trading at less than *half* of what it is in this video!