What’s up everybody! Average Joe here in the comments and I will be responding to every comment received today! Make sure to leave your $0.02 in the comments! 👍😎
2:40 Note it is incorrect to state one can suffer "unlimited downside", either from the ownership of shares or calls. This term is only applicable to being short calls when uncovered as one can lose, theoretically, an infinite amount of money if the call appreciates infinitely (if the stock appreciates infinitely). Being long calls or short (uncovered or not cash secured) puts are considered "defined risk" as one knows how much one can lose in advance: in the case of the former no more than the option premium paid and in the latter no more than if the stock reaches zero.
Agreed, most of the time buying a single option will end up losing money. Better to sell, options. (Don't ever ever ever sell a single naked call). But don't discount using options altogether they do have several benefits. Key to options, IMHO is not to be greedy, and learn prior to trading. My most common option trades are selling covered calls with short expirations, and selling naked puts also with short term on stocks I actually want. Will also do mult-leg of several types and not able to explain in a comment
Nope give me high paying dividend ETFs and I’m all good! Easy invest and forget type of investing and doesn’t matter if it pays monthly quarterly or whatever just get the best dividend paying ETF’s that maintain their value over time. JOE’s my guy and helped me pick the best ones! I did get rid of DIV and SDIV due to loss of value over time regardless of the high dividend pay…Thanks JOE! You’re number 1
I have graduated from mostly buying options to mostly selling options and I am glad I did. Buying options definitely can feel like gambling depending on the circumstances but sometimes it can payoff. When omicron first started and we had the big sell off on Black Friday I was confused since the word out of South Africa was that it wasn’t as bad as delta. That coupled with the anticipation of a “Santa Claus” rally led me to buy calls on SPY. I made a nice quick 50% to end the year on a high note. I also like to play IPO lockup expirations by buying puts since insiders typically sell off their stock to get some profits and the stock typically drops in the short term. Lots of ways to play options to increase your odds but not quite as certain as selling options.
EXCELLENT VID!!! I understand more now than I did before. Great explanation of call options. Ive never dealt with options but I'm very much curious. Do more vids related to options (call and puts, selling and buying). Thanks! Happy New Year!
AWESOME! THANK YOU for the feedback. More videos to come in the future! THANK YOU for watching Sir Francis and for leaving your $0.02 in the comments! 😎👍🏻
Hi Stephen! I am personally not a big fan of LEAPS call options because I prefer to go LONG (AKA Own) a stock that will pay me dividends. With a LEAPS option you are generally buying a call option DEEP IN THE MONEY. For example, if a stock was trading for $100 perhaps you buy the $75 option which will cost a lot of money but SIGNIFICANTLY less than owning 100 share yourself AND the DELTA on the option is so HIGH that the call option then moves almost in tandem with the actual price of the stock. Downside here is you don't get dividends since you don't actually own the stock. THANK YOU for watching Stephen and for leaving your $0.02 in the comments! 😎👍🏻
Your explanation is much better than others that I have seen. I'm very interested in options but the terminology seems to be so alien to just investing in stocks. Looking forward to more vids like this one. Also, your suggestions on which tools/platforms to use for trades.
I have made much more selling covered calls about 1% OTM rather than buying calls. You still pocket the premium and the price increase. Downside is holding a falling knife for fear of a turnaround that leaves your call position uncovered.
Well said Ted. We shouldn't lose our covered position though with a turnaround. Perhaps I am misunderstanding what you are trying to communicate. THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍🏻
Great video as always. Looking forward to you sharing more on your Option experience. Personally, I don't pretend to be experienced with it though I did make a few options trades before. It will great if you can share specific examples from your past experience including what you bought/sold and your profit/loss, more as 'evidence' to help explain what you learned from these trades, what you did wrong, what you did right etc.. I hope this makes sense. Take care man. Great weekend.
I appreciate the feedback from you always. YES, I plan on doing this soon. I already share this information with my Patreon community in the discord chat throughout every week. THANK YOU for watching sagig72 and for leaving your $0.02 in the comments! 😎👍🏻
Hi Christopher! I personally don't use the WeBull app as I didn't really like the interface. I personally use Fidelity and I really like Robinhood for their options interface.
2:45 - How is losing all of your money "unlimited downside"? Sounds limited to me. Short selling has "unlimited" (really also limited) losses if someone gets short squeezed and cannot cover those "borrowed" shares. Also in your example where you state the person buying the call option can only lose $136, is not correct. What if someone exercises the option right at the break even point (say $181.36) late on a Friday, then they hold those shares over the weekend, and then Monday morning (3 days later) the stock is at $175? I think I know what you were trying to say, but you didn't say it well.
I like selling options less than 30 days to expiration. The only options I'll buy are at least 1 year out to expiration. I'm too scared to take the the risk in the short term. The market seems to do the opposite of what I think it should do in the short term.
Would have like to see more of a description of “in the money” and “out of the money” but overall solid options info. Looking forward to more options content from you.
In the money options will be exercised, out of the money are usually not exercised. You have to be careful with dividend stocks near the ex-date because the dividend can make out of the money options worth exercising.
IDK selling options is not that easy either. I was making small gains for a wile. $20 here $40 there until the stock shot up and any profit I made selling options was wiped out when the stock was taken away from me and I was not able to participate in the capital gain from that move.
That's a fair point and I would say we should ONLY sell covered calls on stocks we are OK with being called away from us. That being said, the profits you received were not wiped out. In this case your opportunity risk AKA what you COULD HAVE MADE was much higher than what you actually did make. THANK YOU for watching kokalti and for leaving your $0.02 in the comments! 😎👍🏻
@@AverageJoeInvestor I misspoke. Not wiped out but nullified. I could have just bought the stock and held it and not bother with options which would have resulted with me making the same amount. I'm curious about your strategy and how you deal with different scenarios when selling options.
I profited a little over $8500 in 2021 selling options & invested every penny in dividend stocks. My 2022 goal is $20,000 My rules for options. Try not to sell options on a stock that you do not want to own long term. (Sometimes it’s hard not to when the money is good) Don’t be greedy, sell the option and immediately place a buy to close order limit @ 80% profit expiry 5-10 days before the option expiration. Quite often the volatility swings so much that less than half way through your time to expiration, you can close and roll into a new position collecting more premium. The wheel is the best but don’t get attached to your shares. They are only a tool to make more $
I just subscribed after watching a couple of your prior videos and then this one. I tend to believe that buying options is more gambling than investing. You are at the whims of the market and have time against you. With that said, I have made money buying options but when I pulled my money out, it felt like cashing out at the casino window. Put the money in dividend stocks. Keep up the great content!
AWESOME JAMY! THANK YOU for joining the Average Joe Investor community! I appreciate it! I agree with you about buying options. =) THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍🏻
I've watched many videos on options, and there's just so much to understand about them, it just feels too much like gambling for me to want to buy options. If selling options is significantly more favorable percentage-wise, I *might* look into doing that in the future, so I look forward to your video about it.
LOL, touché! No matter what we say though, there will always be people that drink the Kool-Aid. THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍🏻
Dividend investing is going to come in clutch if we go into a bear market. If the FED reverse tapers and raises interest rates growth stocks are going to get slaughtered.
I agree TJ and I like dividend stocks 100% in a bear market. QUALITY DIVIDEND STOCKS baby! THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍🏻
I AGREE BOB! I also like the flexibility of rolling my option IF I don't like where I am going to land with assignment. THANK YOU for watching Bob and for leaving your $0.02 in the comments! 😎👍🏻
What’s up everybody! Average Joe here in the comments and I will be responding to every comment received today! Make sure to leave your $0.02 in the comments! 👍😎
2:40 Note it is incorrect to state one can suffer "unlimited downside", either from the ownership of shares or calls. This term is only applicable to being short calls when uncovered as one can lose, theoretically, an infinite amount of money if the call appreciates infinitely (if the stock appreciates infinitely). Being long calls or short (uncovered or not cash secured) puts are considered "defined risk" as one knows how much one can lose in advance: in the case of the former no more than the option premium paid and in the latter no more than if the stock reaches zero.
Agreed, most of the time buying a single option will end up losing money. Better to sell, options. (Don't ever ever ever sell a single naked call). But don't discount using options altogether they do have several benefits. Key to options, IMHO is not to be greedy, and learn prior to trading. My most common option trades are selling covered calls with short expirations, and selling naked puts also with short term on stocks I actually want. Will also do mult-leg of several types and not able to explain in a comment
Nope give me high paying dividend ETFs and I’m all good! Easy invest and forget type of investing and doesn’t matter if it pays monthly quarterly or whatever just get the best dividend paying ETF’s that maintain their value over time. JOE’s my guy and helped me pick the best ones! I did get rid of DIV and SDIV due to loss of value over time regardless of the high dividend pay…Thanks JOE! You’re number 1
THANK YOU so much for the feedback! I really appreciate it! =)
I have graduated from mostly buying options to mostly selling options and I am glad I did. Buying options definitely can feel like gambling depending on the circumstances but sometimes it can payoff. When omicron first started and we had the big sell off on Black Friday I was confused since the word out of South Africa was that it wasn’t as bad as delta. That coupled with the anticipation of a “Santa Claus” rally led me to buy calls on SPY. I made a nice quick 50% to end the year on a high note. I also like to play IPO lockup expirations by buying puts since insiders typically sell off their stock to get some profits and the stock typically drops in the short term. Lots of ways to play options to increase your odds but not quite as certain as selling options.
Can we do cover call, or sell security put
Yes, we will definitely cover this in future videos. =) THANK YOU for watching Lian and for leaving your $0.02 in the comments! 😎👍🏻
EXCELLENT VID!!! I understand more now than I did before. Great explanation of call options. Ive never dealt with options but I'm very much curious. Do more vids related to options (call and puts, selling and buying). Thanks! Happy New Year!
AWESOME! THANK YOU for the feedback. More videos to come in the future! THANK YOU for watching Sir Francis and for leaving your $0.02 in the comments! 😎👍🏻
I really appreciate this information. I’m trying to learn the stuff and practice it!
You bet Gilbert! THANK YOU for watching and for leaving your $0.02 in the comments! 👍😎
hi Joe, can you explain LEAPS call option, and how to do it?
Hi Stephen! I am personally not a big fan of LEAPS call options because I prefer to go LONG (AKA Own) a stock that will pay me dividends. With a LEAPS option you are generally buying a call option DEEP IN THE MONEY. For example, if a stock was trading for $100 perhaps you buy the $75 option which will cost a lot of money but SIGNIFICANTLY less than owning 100 share yourself AND the DELTA on the option is so HIGH that the call option then moves almost in tandem with the actual price of the stock. Downside here is you don't get dividends since you don't actually own the stock. THANK YOU for watching Stephen and for leaving your $0.02 in the comments! 😎👍🏻
Your explanation is much better than others that I have seen. I'm very interested in options but the terminology seems to be so alien to just investing in stocks. Looking forward to more vids like this one. Also, your suggestions on which tools/platforms to use for trades.
THANK YOU for the feedback! More videos to come in the future. THANK YOU for watching and for leaving your $0.02 in the comments! 👍😎
I have made much more selling covered calls about 1% OTM rather than buying calls. You still pocket the premium and the price increase. Downside is holding a falling knife for fear of a turnaround that leaves your call position uncovered.
Well said Ted. We shouldn't lose our covered position though with a turnaround. Perhaps I am misunderstanding what you are trying to communicate. THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍🏻
Thanks for the great video! I just started option selling recently so these videos are very interesting and informational. Please keep them coming...
Excellent video explaining options, I’ve seen so many but this one was the easiest to follow. 1 question, where did the $2.90 come from?
Great video as always. Looking forward to you sharing more on your Option experience. Personally, I don't pretend to be experienced with it though I did make a few options trades before. It will great if you can share specific examples from your past experience including what you bought/sold and your profit/loss, more as 'evidence' to help explain what you learned from these trades, what you did wrong, what you did right etc.. I hope this makes sense. Take care man. Great weekend.
I appreciate the feedback from you always. YES, I plan on doing this soon. I already share this information with my Patreon community in the discord chat throughout every week. THANK YOU for watching sagig72 and for leaving your $0.02 in the comments! 😎👍🏻
how about a topic on the best brokerage for options trading and buying fractional shares?
can you do a video on how to sell covered calls on the webull app? I'm terrified and confused to sell
Hi Christopher! I personally don't use the WeBull app as I didn't really like the interface. I personally use Fidelity and I really like Robinhood for their options interface.
@@AverageJoeInvestor thank you for your honesty and your continued quality content is greatly appreciated by me
2:45 - How is losing all of your money "unlimited downside"? Sounds limited to me. Short selling has "unlimited" (really also limited) losses if someone gets short squeezed and cannot cover those "borrowed" shares. Also in your example where you state the person buying the call option can only lose $136, is not correct. What if someone exercises the option right at the break even point (say $181.36) late on a Friday, then they hold those shares over the weekend, and then Monday morning (3 days later) the stock is at $175? I think I know what you were trying to say, but you didn't say it well.
I like selling options less than 30 days to expiration. The only options I'll buy are at least 1 year out to expiration. I'm too scared to take the the risk in the short term. The market seems to do the opposite of what I think it should do in the short term.
THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍🏻
Yes, you right 👍👍
THANK YOU for watching and for leaving your $0.02 in the comments! 👍😎
Would have like to see more of a description of “in the money” and “out of the money” but overall solid options info. Looking forward to more options content from you.
In the money options will be exercised, out of the money are usually not exercised. You have to be careful with dividend stocks near the ex-date because the dividend can make out of the money options worth exercising.
THANK YOU for the feedback Luke! I appreciate it!
IDK selling options is not that easy either. I was making small gains for a wile. $20 here $40 there until the stock shot up and any profit I made selling options was wiped out when the stock was taken away from me and I was not able to participate in the capital gain from that move.
That's a fair point and I would say we should ONLY sell covered calls on stocks we are OK with being called away from us. That being said, the profits you received were not wiped out. In this case your opportunity risk AKA what you COULD HAVE MADE was much higher than what you actually did make. THANK YOU for watching kokalti and for leaving your $0.02 in the comments! 😎👍🏻
@@AverageJoeInvestor I misspoke. Not wiped out but nullified. I could have just bought the stock and held it and not bother with options which would have resulted with me making the same amount. I'm curious about your strategy and how you deal with different scenarios when selling options.
I profited a little over $8500 in 2021 selling options & invested every penny in dividend stocks.
My 2022 goal is $20,000
My rules for options.
Try not to sell options on a stock that you do not want to own long term. (Sometimes it’s hard not to when the money is good)
Don’t be greedy, sell the option and immediately place a buy to close order limit @ 80% profit expiry 5-10 days before the option expiration.
Quite often the volatility swings so much that less than half way through your time to expiration, you can close and roll into a new position collecting more premium.
The wheel is the best but don’t get attached to your shares. They are only a tool to make more $
Very well said. I agree 100% - THANK YOU for watching and for leaving your $0.02 in the comments! 👍😎
How do you make the close order limit. Can you explain
I just subscribed after watching a couple of your prior videos and then this one. I tend to believe that buying options is more gambling than investing. You are at the whims of the market and have time against you. With that said, I have made money buying options but when I pulled my money out, it felt like cashing out at the casino window. Put the money in dividend stocks. Keep up the great content!
AWESOME JAMY! THANK YOU for joining the Average Joe Investor community! I appreciate it! I agree with you about buying options. =) THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍🏻
Good video. Please talk about tax treatments
I've watched many videos on options, and there's just so much to understand about them, it just feels too much like gambling for me to want to buy options.
If selling options is significantly more favorable percentage-wise, I *might* look into doing that in the future, so I look forward to your video about it.
I completely understand Bryan. More to come. THANK YOU for watching and for leaving your $0.02 in the comments! 👍😎
I only buy OTM Calls on AAPL that expire in two days just before earnings announcement.
/s
I'm no WSB degenerate
i only sell covered calls and cash secured puts. I don't buy them.
Nothing wrong with buying puts. Insurance on your stocks.
Stop telling people not to buy options. Who am I going to sell my contracts to?
LOL, touché! No matter what we say though, there will always be people that drink the Kool-Aid. THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍🏻
Dividend investing is going to come in clutch if we go into a bear market. If the FED reverse tapers and raises interest rates growth stocks are going to get slaughtered.
I agree TJ and I like dividend stocks 100% in a bear market. QUALITY DIVIDEND STOCKS baby! THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍🏻
Always sell the Options! Never ever buy one unless you have the insider info which is illegal and you'll go to jail!
Haha, THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍🏻
Always enjoy your videos! Fortunatly I'm able to sell cash secured puts, less stressful (at least for me)
I AGREE BOB! I also like the flexibility of rolling my option IF I don't like where I am going to land with assignment. THANK YOU for watching Bob and for leaving your $0.02 in the comments! 😎👍🏻
🧡
THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍🏻
😯
THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍🏻
Agree, options are a loser strategy