The way it works compared the Wheel is you can get 4-6 leap contracts for the price on on lot(100 shares) of stock. that means you can sell 4-6 times the covered calls, and each contract can have over 3* the leverage of shares. The bad part is if you pick the wrong ticker, or get unlucky and the ticker moves against you and out of the money, you lose twice. 1) you can not longer sell covered calls, 2) you either have to wait for it to comeback, or lose 50%+ of your money in the leap.
I have a friend who is interested in the PMCC and I just don’t see the risk-reward value proposition. It seems like the downside exposure is high while the upside seems limited outside of the underlying stock moving strongly… all while having the capital outlay up front and little cash flow in the time of the campaign. I am biased to selling options and trying to stay open to the buy side. I appreciate you explaining this further. Unfortunately I just don’t get this ESPECIALLY if you have a limited/smaller account. What am I missing?
So you can sell the long call and short call at any time or together? And you said if the the price of the stock comes down on the long call you lose money, my understanding is that the closer the price of the stock to the strike price the more the call is worth. Thanks in advance
Try using a ZEBRA spread for the long side. If the stock trades sideways, you’ll avoid the time decay and make the full return on the short call. And if the stock goes up, it will trade like 100 deltas instead of 80 deltas.
When they ask you the questions at the beginning you have to say you have 10+ years of experience and your risk tolerance is maxed out etc. You also need to have margin enabled.
I just sold a call vertical spread to lower the entry price to buy a LEAP of CRWD at STK 180 with expiration 9/2025. Now I can start selling weekly cover calls, collecting passive income between $400-$500 per week while I'm waiting for the move up. The long call is offering more than 60% if goes back to previous highs. Btw Henry, I have an Earning strategy that I have been doing for a while that I want to share with you for your evaluation and if you want you can share with your followers. Thanks
Can you give more details on your vertical leap. I understand it’s a credit spread but how wide are the strikes and how far out in time. Also can you share your earnings strategy if you please. Thanks
The way it works compared the Wheel is you can get 4-6 leap contracts for the price on on lot(100 shares) of stock. that means you can sell 4-6 times the covered calls, and each contract can have over 3* the leverage of shares. The bad part is if you pick the wrong ticker, or get unlucky and the ticker moves against you and out of the money, you lose twice. 1) you can not longer sell covered calls, 2) you either have to wait for it to comeback, or lose 50%+ of your money in the leap.
What's the benefit of buying the LEAPS ITM oppose to OTM?
Don't you want to buy the ITM LEAPS 12+ month for potential tax advantages?
I have a friend who is interested in the PMCC and I just don’t see the risk-reward value proposition. It seems like the downside exposure is high while the upside seems limited outside of the underlying stock moving strongly… all while having the capital outlay up front and little cash flow in the time of the campaign.
I am biased to selling options and trying to stay open to the buy side. I appreciate you explaining this further. Unfortunately I just don’t get this ESPECIALLY if you have a limited/smaller account.
What am I missing?
So you can sell the long call and short call at any time or together? And you said if the the price of the stock comes down on the long call you lose money, my understanding is that the closer the price of the stock to the strike price the more the call is worth. Thanks in advance
Try using a ZEBRA spread for the long side. If the stock trades sideways, you’ll avoid the time decay and make the full return on the short call. And if the stock goes up, it will trade like 100 deltas instead of 80 deltas.
Can this be done with level 2 options on Robinhood
I can’t do any of these because I can’t get approved for spreads on Robinhood. Anything I can do?
When they ask you the questions at the beginning you have to say you have 10+ years of experience and your risk tolerance is maxed out etc. You also need to have margin enabled.
Hi Henry, can you do a poor man covered put video
Very helpful just starting out. Risk management, no stress and profitable strategy.
Thank again Henry. I try robeenhood mobil but i can,t ceate poor man,s cover call. can anyone give me a tip. Thanks
Do you have top level option authorization? A margin account? You have to be Robinhood gold member and have the highest level of options set up.
thoughts on NANC/KRUZ?
How do you close those out?? When you know you made money do you close out sell/call first then close the buy/call???
Yes, close the short leg first
Got nvidia bull call spreads today at the dip today, up 20% at market close.
I just sold a call vertical spread to lower the entry price to buy a LEAP of CRWD at STK 180 with expiration 9/2025.
Now I can start selling weekly cover calls, collecting passive income between $400-$500 per week while I'm waiting for the move up. The long call is offering more than 60% if goes back to previous highs.
Btw Henry, I have an Earning strategy that I have been doing for a while that I want to share with you for your evaluation and if you want you can share with your followers. Thanks
Can you sell covered call on the long call without owning stocks on weekly?
Can you give more details on your vertical leap. I understand it’s a credit spread but how wide are the strikes and how far out in time. Also can you share your earnings strategy if you please. Thanks
can someone tell me why my robenhood app can't settingup poorman cover like heny thank
If the AAPL 235/190 pmcc gets assigned you still profit 1028 providing you close your 3/21/25 position.
Hey it’s your Uncle Henry here and as you can see by these gains, I’m bullish all gym stocks
Do you have a discord group?
Is the wheel strategy At The Money a good strategy if you just want to be collecting premiums and don’t care about getting assigned
in general it is a good strategy but i believe most people want to stay in a .20 to a .30 delta
I would agree, keep the gains small keeping losses even smaller
If QQQ is a good candidate how bout TQQQ?
What's with the beaters?
Helps with the wife beating training be my guess. Ground and pound for dominance!! I'm not a relationship advisor-disclaimer
Simpsons, not south park
I see you with the guns out, Uncle Henry 😊
The best traders ever have done way less percentage but you're telling us neophytes can make way more? ?