Start early with diversified investments in stocks, bonds, and real estate. Maximize contributions to tax-advantaged accounts like 401(k)s and IRAs. Regularly review and adjust your strategy to ensure security.
People dont understand that the prices of things are never going back down. This inflation is deeper than we think. Those buying groceries are well aware that the real inflation is much over 10%. The increments dont match our income, yet certain investors still earn over $365,000 in stocks and assets. Wish I could accomplish that.
Very possible! especially at this moment. Profits can be made in many different ways, but such intricate transactions should only be handled by seasoned market professionals.
Some persons think inves'tin is all about buying stocks; I think going into the stock market without a good experience is a big risk, that's why I'm lucky to have seen someone like mr Brian C Nelson.
Great lesson Jessica! Wondering if you could follow-up with a Trade Management session that show how you continue to roll the short leg. Maybe you could include in an overall CC, CSP and PMCC Trade Management Session?
What happens with the long call position after the initial trade? All of the PMCC information generally shows an initial trade and that is it. If you purchase a deep in the money call - say on $APPL (currently $216.75) for the $180 strike for June 20, 2025 with a Delta of 0.85 for ~$58/share - and I continue to sell covered calls on this long position for 5-6 months, and earn premium. Now it's January 2025, and say $AAPL is now at $255/share. Can you then exercise the long call as a way to purchase the stock at the $180 price and have an unrealized gain of $75/share? Or would it be better to sell your long call, and take the difference in premium? The end of this PMCC strategy is a conundrum to me!!
Great question and here is my take as another student of investing - essentially yes, you DO sell the LEAP you had bought (180 strike). But 2 important keys 1. You do NOT wait until expiry date. The reason is that as you probably already know, theta decay is massive from DTE-30/40 days out. So, to minimize your leap evaporating in value, you should always close ~3-4 mths before expiry. In your example, April would be a good time to close at the latest. 2. To stay in this trade, you would then re-buy a new AAPL leap again, for 1 year+ out. However, you will pick the same delta (0.2-0.3) to buy the new strike. I would guess this LEAP would have a strike of say, $190 or maybe $200 instead of the last time's $180 strike. This is known as "rolling your LEAP".
And finally, you would almost never, ever, exercise your call option. Same rationale as point 1, you basically would need to wait till expiry to exercise, in which you have lost a MASSIVE amount of extrinsic value (IV, theta mostly). Just roll it or buy to close.
Start early with diversified investments in stocks, bonds, and real estate. Maximize contributions to tax-advantaged accounts like 401(k)s and IRAs. Regularly review and adjust your strategy to ensure security.
People dont understand that the prices of things are never going back down. This inflation is deeper than we think. Those buying groceries are well aware that the real inflation is much over 10%. The increments dont match our income, yet certain investors still earn over $365,000 in stocks and assets. Wish I could accomplish that.
Very possible! especially at this moment. Profits can be made in many different ways, but such intricate transactions should only be handled by seasoned market professionals.
Some persons think inves'tin is all about buying stocks; I think going into the stock market without a good experience is a big risk, that's why I'm lucky to have seen someone like mr Brian C Nelson.
Finding yourself a good broker is as same as finding a good wife, which you go less stress, you get just enough with so much little effort at things
I'm surprised that you just mentioned and recommend Mr Brian Nelson. I met him at a conference in 2018 and we have been working together ever since.
Great lesson Jessica! Wondering if you could follow-up with a Trade Management session that show how you continue to roll the short leg. Maybe you could include in an overall CC, CSP and PMCC Trade Management Session?
Can I get to the same screen you are using from Fidelity? My screens don't look like yours so it is hard to follow along.
Great lesson...thanks
How do you deal with the long call when it gets closer to the expiration date? Do you sell it for the same strike price?
Loved the video. Thank you.
Thanks for all your knowledge
What happens with the long call position after the initial trade? All of the PMCC information generally shows an initial trade and that is it. If you purchase a deep in the money call - say on $APPL (currently $216.75) for the $180 strike for June 20, 2025 with a Delta of 0.85 for ~$58/share - and I continue to sell covered calls on this long position for 5-6 months, and earn premium. Now it's January 2025, and say $AAPL is now at $255/share. Can you then exercise the long call as a way to purchase the stock at the $180 price and have an unrealized gain of $75/share? Or would it be better to sell your long call, and take the difference in premium? The end of this PMCC strategy is a conundrum to me!!
Great question and here is my take as another student of investing - essentially yes, you DO sell the LEAP you had bought (180 strike). But 2 important keys
1. You do NOT wait until expiry date. The reason is that as you probably already know, theta decay is massive from DTE-30/40 days out. So, to minimize your leap evaporating in value, you should always close ~3-4 mths before expiry. In your example, April would be a good time to close at the latest.
2. To stay in this trade, you would then re-buy a new AAPL leap again, for 1 year+ out. However, you will pick the same delta (0.2-0.3) to buy the new strike. I would guess this LEAP would have a strike of say, $190 or maybe $200 instead of the last time's $180 strike. This is known as "rolling your LEAP".
And finally, you would almost never, ever, exercise your call option. Same rationale as point 1, you basically would need to wait till expiry to exercise, in which you have lost a MASSIVE amount of extrinsic value (IV, theta mostly). Just roll it or buy to close.
Won't implied volatility affect the profits amount? if high or low at time of assignment?
Jessica you look beautiful by the way.
Poor man doesn't sound nice, use synthetic covered call