Happy Tuesday Everybody! Make sure to leave your $0.02 in the comments! Make sure to also check out Fnvest and learn how you can diversify your portfolio with U.S. Treasuries which you can buy from your phone: finvest.1stcollab.com/averagejoeinvestor_yt_2
Yes, brokerage fees DO need to be considered, BUT most are $0.65 per contract or FREE so not a huge consideration. THANK YOU for watching and for leaving your $0.02 in the comments! =)
Buying some AMD shares. So far at a descent average. Seeking to learn more about selling Covered Call(s). Think I've got it understood properly. I think I'll focus on obtaining Quality Stocks in 100 share lots and educate myself here for a while. I buy calls and puts to open and sell to close each day. I look forward to learning more about selling Covered Calls and Selling Puts to open, safely and smartly. Thanks for your Service and Merry Christmas Everyone !
Love the content! I have a question; why "roll no matter what"? Why not just let them expire or assign and put options in the next day? I feel like rolling would kill some of my profits, no?
Good Question. You can certainly let them expire BUT you then, with most brokerages, you lose a day of efficiency because you cannot usually write 0DTE options. You can also take assignment if you want to and run the wheel strategy. Rolling keeps the strategy simple. =) THANK YOU for watching and for leaving your $0.02 in the comments! =)
My 2 cents worth is I sell call credit spreads on IWM with 3 to 5 days out with 2 to 3 dollars wide.. usually around 20 to 35 deltas selling 5 to 7 contracts makes me 100 to 200 dollars. Did about 18 of them since Jan. 24 with 3 loss and had to roll them for another credit. I also sell puts yet that is usually a month to 1.5 months out. So strategy works if your sell covered call or PMCC's or PMCP's, spreads even Iron condors. The big idea is mental Disciple and have a strategy and stick to it..
I will usually manage my existing positions and OPEN new positions near market end which is around 1pm PST. THANK YOU for watching and for leaving your $0.02 in the comments! =)
Excellent video Joe. My question for daily is this - do we have any issues with the timing of cash settlement? I am selling puts with this same method - daily - and I feel like there are times where I am ready to sell another put, but the previous day has not yet settled. Maybe my timing is off? Thanks!
Same question for me. Seems like rolling is the only way to sell something for the next trading day before the market closes; unless you have another unused 100 shares hiding somewhere.
I will usually roll for a NET CREDIT or close the existing position earlier in the day then open a new position before market close. THANK YOU for watching and for leaving your $0.02 in the comments! =)
You can always get more information by checking out the Average Joe Investor Patreon Community. Link is in the description. THANK YOU for watching and for leaving your $0.02 in the comments! =)
Agreed, it IS more consequential with PMCC. No, I have not missed one but it certainly COULD happen. In that scenario I could get assigned and be short 100 shares of the investment. I would then immediately buy 100 shares at current market prices to close the position. THANK YOU for watching and for leaving your $0.02 in the comments! =)
Ah, so you’re going naked or at least not required to have all the shares? I know Schwab allows partial collateral for CSEPs, so you can do the same thing with CCs?
When I was selling IWM covered calls Monday, Wednesday and Friday, I would enter a limit BTC for 0.01 as soon as I did the STO and then repeated. So Monday afternoon I would sell the Wednesday covered call and immediately do a buy to close for 0.01. By Wednesday afternoon the BTC would exercise and I'd set up for Friday.
I open a new position and tend to roll my positions near end of day. I also will enter a BUY TO CLOSE order which is Good Til Cancelled (GTC) for $0.01 so that my position is automatically closed PRIOR to expiration if market doesn't move against me. THANK YOU for watching and for leaving your $0.02 in the comments! =)
@@Marshall_Macro in the universe I have to make .0065 per share. It seems to be a small price and I can move forward that day without having to wait for the option to expire or selling a naked CC.
You should also calculate the ROI on annual basis for income generated from Daily options. If your returns are lets say greater than 15% than you are probably beating out some top performing Covered call ETFs but if its even near that range than I would let a somebody manage it through ETFs. Also these days consider the weekly 0DTE dividend ETFs, they seem to be quite aggressive as well.
I think it depends on what you are trying to accomplish. IF your goal is to get acclimated to the strategy i think using quality dividend stocks can be a great fit and there should be plenty of options you can look at. You can also just continue to wait and save then get to 100 shares of IWM. THANK YOU for watching and for leaving your $0.02 in the comments! =)
@@AverageJoeInvestor when you say roll to the following delta, does that mean you’ll roll to the 15-20 delta the next day and take a debit to do so if that is the case? Thanks for your response!
cant see a way to ask a private question, so ill ask here....several months ago watched one of your videos about which websites/apps you use but cant remember the title
Considering starting a covered call strategy with US Bank stock (a name dropped in a recent Joe vid) -- problem is nobody is interested in buying a covered call contract on that stock.
It's where you execute a buy to close and a sell to open as a single event. It allows you to move the date out or the strike price up on covered calls.
GREAT QUESTION! Rolling = Buying to close your existing contract and selling to open a new contract. THANK YOU for watching and for leaving your $0.02 in the comments! 👍😎
Hi Joe, really sorry to ask but how do you get to 22 days trading days a month? I can only get to 20/21 based on 365 days - 104 weekends and then removing some holidays when exchanges are closed - 10 = 251 / 12 = 20.9. I ask this as it makes a difference to your calcs on annual and monthly returns.
I have found that to be the average but some months will be 20-21. doesn't change the math much.. THANK YOU for watching and for leaving your $0.02 in the comments! =)
6 months later, I guess you've missed a lot of upside if you indeed sold daily covered calls on any of these indices. I did the math the other day on my own, and selling daily CCs was a loser in a big up market and a down market. These definitely has to be correct timing involved with selling CCs or you increase your cost basis which lead to missing out or downright losses.
For those following these comments.... today (5/23) has been sobering from a selling puts perspective. The market is down, but not drastically. Thus far, I am in the hole almost $300 for the day, which wipes out about 10 days worth of minor trades. Again, I'm new to this and am just learning - but IWM and QQQ have burned me badly today on selling puts. I did roll both positions to tomorrow - and we shall see. But, those that said this requires lots of baby-sitting on the selling puts side - my comment from today is Amen!
I can appreciate that and YES days like today certainly challenge our position, BUT it also depends on the STRIKE PRICE/strategy. Thank you for weighing in. 👍
So you get a 87% chance each time to get $240 monthly on $20,800 invested = 0.87 x 1.153 = 1% on your money/month if you lucky and working every day to maintain this. is that about right? now this all taxed at regular rate so between that and fees you gotta split this so say 6% yearly grinding every day. why don't you just put it all in cash and get 5% interest?
I do sell options on SPY, (as a wheel) I also sell way out of the money PUTs on NVDA. As it is has alot of volatility they generate a ton of income potential. For example, I sold at about 3:55 today the 830 for about 3.50 a share. (now I know they announce earnings tomorrow, and i dont like selling right into earnings. but if for some reason the stocks goes to my assignment price. I will wheel it and sell the calls. (yeah i have the cash for the 100 shares) Of course if the volatility declines this tatic might stop being lucrative. Oh I am quite knowledgeable on Nividia and NVDA. I have been owning shares of the company on and off for over 15 years. (started selling the OTM PUTS when I got called away when the stock exploded a few months ago.)
Yes this is true BUT I have found in my experience that rolling my contracts to pivot when markets move hard has worked for me. =) THANK YOU for watching and for leaving your $0.02 in the comments! =)
Those commissions and fees are at all-time low's at most brokerages. $0.65 per contract for me and many get it lower elsewhere. THANK YOU for watching and for leaving your $0.02 in the comments! =)
This approach is not for me. You get more downside protection selling further out in time too and is less active and being more passive is important to me. I sell 30 to 45 days out on my wheel options strategy (tasty mechanics) and i sell even further out on my long term dividend portfolio. But everyone is different and so you need to do what’s best for you.
In that situation you can hold off on writing options or just continue to write and then roll for a NET DEBIT if needed when market moves up fast. THANK YOU for watching and for leaving your $0.02 in the comments! =)
That's dumb.. I usually go 1 strike below in the money. It is just enough to not usually get called up. And if it sells so what. You did not really loose. Your premium plus stock price is usually equals the stock price.
I can appreciate where you are coming from. It's true that to go daily you WOULD need to get to 100 shares of IWM which is north of $20K. You can either wait to start or go weekly with quality dividend stocks. THANK YOU for watching and for leaving your $0.02 in the comments! =)
Happy Tuesday Everybody! Make sure to leave your $0.02 in the comments! Make sure to also check out Fnvest and learn how you can diversify your portfolio with U.S. Treasuries which you can buy from your phone: finvest.1stcollab.com/averagejoeinvestor_yt_2
Those broker fees add up doing that 22 times vs 4 times for weekly and vs 1 time monthly. Need to factor that in
There are many brokers with no commissions
Yes, brokerage fees DO need to be considered, BUT most are $0.65 per contract or FREE so not a huge consideration. THANK YOU for watching and for leaving your $0.02 in the comments! =)
Yeah a whopping $11.70 a month if you use Fidelity.
Can you do daily options on a robinhood cash account? If so what time every morning to you start selling options?@@AverageJoeInvestor
@@ChannelSyxxI’ve been trading since Sept. and have already accused $600 in broker fees, they definitely add up
Buying some AMD shares. So far at a descent average. Seeking to learn more about selling Covered Call(s). Think I've got it understood properly. I think I'll focus on obtaining Quality Stocks in 100 share lots and educate myself here for a while. I buy calls and puts to open and sell to close each day. I look forward to learning more about selling Covered Calls and Selling Puts to open, safely and smartly. Thanks for your Service and Merry Christmas Everyone !
Been following for a while. Just started this strategy yesterday. Currently selling daily puts. 👍
AWESOME!! THANK YOU for watching and for leaving your $0.02 in the comments! =)
Good choice. I don’t know why he illustrated selling calls? In a bull market???
Love the content!
I have a question; why "roll no matter what"? Why not just let them expire or assign and put options in the next day? I feel like rolling would kill some of my profits, no?
Good Question. You can certainly let them expire BUT you then, with most brokerages, you lose a day of efficiency because you cannot usually write 0DTE options. You can also take assignment if you want to and run the wheel strategy. Rolling keeps the strategy simple. =) THANK YOU for watching and for leaving your $0.02 in the comments! =)
I do weekly or biweekly usually
GREAT! THANK YOU for watching and for leaving your $0.02 in the comments! =)
are you selling covered calls or selling cash-secured puts in the IWM example above?
My 2 cents worth is I sell call credit spreads on IWM with 3 to 5 days out with 2 to 3 dollars wide.. usually around 20 to 35 deltas selling 5 to 7 contracts makes me 100 to 200 dollars. Did about 18 of them since Jan. 24 with 3 loss and had to roll them for another credit. I also sell puts yet that is usually a month to 1.5 months out. So strategy works if your sell covered call or PMCC's or PMCP's, spreads even Iron condors. The big idea is mental Disciple and have a strategy and stick to it..
Can I ask when do you start to open a daily trade? Is it at before today’s market close for next day’s trade?
after 10 am works great........................peace
I will usually manage my existing positions and OPEN new positions near market end which is around 1pm PST. THANK YOU for watching and for leaving your $0.02 in the comments! =)
Excellent video Joe. My question for daily is this - do we have any issues with the timing of cash settlement? I am selling puts with this same method - daily - and I feel like there are times where I am ready to sell another put, but the previous day has not yet settled. Maybe my timing is off? Thanks!
Is closing early an option?
Same question for me. Seems like rolling is the only way to sell something for the next trading day before the market closes; unless you have another unused 100 shares hiding somewhere.
@@mm96817 Seems like rolling every day would be the way to manage it, but I haven’t theory crafted that out, hopefully Joe can chime in.
I will usually roll for a NET CREDIT or close the existing position earlier in the day then open a new position before market close. THANK YOU for watching and for leaving your $0.02 in the comments! =)
Hey, thanks for really interesting video. Where I could learn more about ETF Options? I'm new to the subject. I only have some stocks and GB treasury.
Are the three ETFs mentioned in this video still the only three assets with daily options contracts?
I need some training on this!
You can always get more information by checking out the Average Joe Investor Patreon Community. Link is in the description. THANK YOU for watching and for leaving your $0.02 in the comments! =)
Good explanation, but wouldn't it be better to do a vertical spread to limit the risk? A +5 buy would cost very little and provide a downside limit.
Have you ever totally missed a market end of day? Might be more consequential with the PMCC version.
Agreed, it IS more consequential with PMCC. No, I have not missed one but it certainly COULD happen. In that scenario I could get assigned and be short 100 shares of the investment. I would then immediately buy 100 shares at current market prices to close the position. THANK YOU for watching and for leaving your $0.02 in the comments! =)
Ah, so you’re going naked or at least not required to have all the shares? I know Schwab allows partial collateral for CSEPs, so you can do the same thing with CCs?
What time of the day do u do this in the morning or the day before closing for the next day?
When I was selling IWM covered calls Monday, Wednesday and Friday, I would enter a limit BTC for 0.01 as soon as I did the STO and then repeated. So Monday afternoon I would sell the Wednesday covered call and immediately do a buy to close for 0.01. By Wednesday afternoon the BTC would exercise and I'd set up for Friday.
I open a new position and tend to roll my positions near end of day. I also will enter a BUY TO CLOSE order which is Good Til Cancelled (GTC) for $0.01 so that my position is automatically closed PRIOR to expiration if market doesn't move against me. THANK YOU for watching and for leaving your $0.02 in the comments! =)
Good way to save time and get money back… have you found it worth the $.65 per contract to get out early?
@@Marshall_Macro in the universe I have to make .0065 per share. It seems to be a small price and I can move forward that day without having to wait for the option to expire or selling a naked CC.
Great video. What about commission fees? What would be the most efficient, daily vs weekly?
Thank you for the hard work on your videos Mr. Joe
Joe, do you sell the daily option at the opening or the day before?
You should also calculate the ROI on annual basis for income generated from Daily options. If your returns are lets say greater than 15% than you are probably beating out some top performing Covered call ETFs but if its even near that range than I would let a somebody manage it through ETFs. Also these days consider the weekly 0DTE dividend ETFs, they seem to be quite aggressive as well.
Covered calls daily yes… selling puts daily na not enough premium and a lot of baby sitting.
A lot of babysitting, and tons of risk.
THANK YOU for watching and for leaving your $0.02 in the comments! =)
Average Joe! I don’t have enough $ to do daily options. I have about $12k, can you suggest a couple tickers?
Love you and your channel.
Thank you 🙏
I think it depends on what you are trying to accomplish. IF your goal is to get acclimated to the strategy i think using quality dividend stocks can be a great fit and there should be plenty of options you can look at. You can also just continue to wait and save then get to 100 shares of IWM. THANK YOU for watching and for leaving your $0.02 in the comments! =)
Are you selling these CCs every day even when you are below cost basis? Great video!
Yes I am. I stick with 15-20 Deltas MAX and always roll to the following delta. THANK YOU for watching and for leaving your $0.02 in the comments! 👍😎
@@AverageJoeInvestor when you say roll to the following delta, does that mean you’ll roll to the 15-20 delta the next day and take a debit to do so if that is the case? Thanks for your response!
That is correct OR go slightly more aggressive to get a NET CREDIT.
I already have a call option that I’m negative on with IWM….its a 6/28 option…can I use this in the meantime to sell daily options??
One has to take into account what it costs to close the call positions daily as well
Yes this is true but fees and costs are ultra-low. THANK YOU for watching and for leaving your $0.02 in the comments! =)
cant see a way to ask a private question, so ill ask here....several months ago watched one of your videos about which websites/apps you use but cant remember the title
Considering starting a covered call strategy with US Bank stock (a name dropped in a recent Joe vid) -- problem is nobody is interested in buying a covered call contract on that stock.
Do you mostly sell cash secured puts or covered calls?
Do you fill your contacts at open or about a hour after bell to let some iv die down before entry ?
When you say daily options, do you mean 0DTE?
What does it mean to roll a contract?
It's where you execute a buy to close and a sell to open as a single event. It allows you to move the date out or the strike price up on covered calls.
GREAT QUESTION! Rolling = Buying to close your existing contract and selling to open a new contract. THANK YOU for watching and for leaving your $0.02 in the comments! 👍😎
Hi Joe, really sorry to ask but how do you get to 22 days trading days a month? I can only get to 20/21 based on 365 days - 104 weekends and then removing some holidays when exchanges are closed - 10 = 251 / 12 = 20.9. I ask this as it makes a difference to your calcs on annual and monthly returns.
PS Love your channel and once I get going will be a subscriber 🎉. Keep up the wonderful work you do. Thanks
I have found that to be the average but some months will be 20-21. doesn't change the math much.. THANK YOU for watching and for leaving your $0.02 in the comments! =)
Great stuff! Thanks for sharing! Curious what kind of income you make on TH-cam?
6 months later, I guess you've missed a lot of upside if you indeed sold daily covered calls on any of these indices. I did the math the other day on my own, and selling daily CCs was a loser in a big up market and a down market. These definitely has to be correct timing involved with selling CCs or you increase your cost basis which lead to missing out or downright losses.
For those following these comments.... today (5/23) has been sobering from a selling puts perspective. The market is down, but not drastically. Thus far, I am in the hole almost $300 for the day, which wipes out about 10 days worth of minor trades. Again, I'm new to this and am just learning - but IWM and QQQ have burned me badly today on selling puts. I did roll both positions to tomorrow - and we shall see. But, those that said this requires lots of baby-sitting on the selling puts side - my comment from today is Amen!
I can appreciate that and YES days like today certainly challenge our position, BUT it also depends on the STRIKE PRICE/strategy. Thank you for weighing in. 👍
So you get a 87% chance each time to get $240 monthly on $20,800 invested = 0.87 x 1.153 = 1% on your money/month if you lucky and working every day to maintain this. is that about right? now this all taxed at regular rate so between that and fees you gotta split this so say 6% yearly grinding every day. why don't you just put it all in cash and get 5% interest?
yup i like daily less risky
THANK YOU for watching and for leaving your $0.02 in the comments! =)
I do sell options on SPY, (as a wheel) I also sell way out of the money PUTs on NVDA. As it is has alot of volatility they generate a ton of income potential. For example, I sold at about 3:55 today the 830 for about 3.50 a share. (now I know they announce earnings tomorrow, and i dont like selling right into earnings. but if for some reason the stocks goes to my assignment price. I will wheel it and sell the calls. (yeah i have the cash for the 100 shares) Of course if the volatility declines this tatic might stop being lucrative. Oh I am quite knowledgeable on Nividia and NVDA. I have been owning shares of the company on and off for over 15 years. (started selling the OTM PUTS when I got called away when the stock exploded a few months ago.)
Today I sold the 6/21 750 @3.65 ~0.05 delta … daily’s, whew lads…
Taxes?
Yes, there are taxes and the gains are taxed at your ordinary rate. THANK YOU for watching and for leaving your $0.02 in the comments! =)
UNG, SLV, TLT, GLD ❤
Shorter the dte, higher the gamma risk
Yes this is true BUT I have found in my experience that rolling my contracts to pivot when markets move hard has worked for me. =) THANK YOU for watching and for leaving your $0.02 in the comments! =)
Those commissions and fees through😢
Those commissions and fees are at all-time low's at most brokerages. $0.65 per contract for me and many get it lower elsewhere. THANK YOU for watching and for leaving your $0.02 in the comments! =)
This approach is not for me. You get more downside protection selling further out in time too and is less active and being more passive is important to me. I sell 30 to 45 days out on my wheel options strategy (tasty mechanics) and i sell even further out on my long term dividend portfolio. But everyone is different and so you need to do what’s best for you.
In a rising market this strategy will generate loss. If index jumps 2-3 percent a given day it has to be settled in cash hence reducing nav.
Until it tanks and your way down on the stock and cant get any premium above your cost basis and your stuck for who knows how long
In that situation you can hold off on writing options or just continue to write and then roll for a NET DEBIT if needed when market moves up fast. THANK YOU for watching and for leaving your $0.02 in the comments! =)
My broker charges $0.65 per contract. That will eat a little into the profits on a daily basis. Still, you come ahead.
Try negotiating the commission down.
Same here. $0.65 per contract though I am going to try and negotiate down soon. THANK YOU for watching and for leaving your $0.02 in the comments! =)
That's dumb.. I usually go 1 strike below in the money. It is just enough to not usually get called up. And if it sells so what. You did not really loose. Your premium plus stock price is usually equals the stock price.
THANK YOU for watching and for leaving your $0.02 in the comments! =)
I mean, this is just a more complicated way to day trade shares, with more fees to boot.
All time high since 2007 😂. Ah to be young again.
THANK YOU for watching and for leaving your $0.02 in the comments! =)
Yeah but you have to have 20,000 to get the 100 shares to sell covered call
Exactly, all these youtubers think their audiences are rich!
Look at Average Joe’s poor man covered calls to help if you have low balance to start with
I can appreciate where you are coming from. It's true that to go daily you WOULD need to get to 100 shares of IWM which is north of $20K. You can either wait to start or go weekly with quality dividend stocks. THANK YOU for watching and for leaving your $0.02 in the comments! =)
None of my investments have daily options. They only offer weekly. ✌️
True, most are only weekly. Only SPY, QQQ and IWM are daily. THANK YOU for watching and for leaving your $0.02 in the comments! =)
Too much baby sitting on daily options, people have jobs and lives!
So productive to announce to the world that not everyone can do this.
Thanks.
It takes me minutes each day to decide on my daily IWM covered calls, but to each their own.
Cc daily yes … puts naaaa
I'm an HVAC technician I'm in the field 12 hrs a day but I still trade daily! If you want it go get it
@@hotfeva9843 I'll pass