How To Buy Back and Roll Out Covered Calls For More Income: Beginners Tutorial
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- Опубликовано: 27 июл 2024
- In this video, I'll show you how to buy back and roll out your covered call contracts for more premium.
This is a strategy I usually use when I see my option contracts decay to around 50-80%. I'll buy back the contracts to lock in my profits and then sell further expiration dated contracts to get more premium from the larger extrinsic value.
Remember that you want to always be bullish on the stocks you own when you sell covered calls. Make sure the companies you choose are in the S&P500/DOW30, have strong fundamentals and technicals, and most likely pays a dividend. These are the companies I found that are more reliable when it comes to selling/writing covered calls for income.
Hope this helps and brings you a lot of value! :)
Let me know your questions down below!
-Steve
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It's all thanks to Steve, I learned about selling covered calls and grow my portfolio exponentially. Thank you Steve!
I see how you were a grade school teacher, very good at explaining
Great 👍. I love to watch your videos. it's helpful for me
But if the underlying stock is going down or trending sideways, why not just let the covered call option expire, keep the original premium in its entirety, keep the underlying stock too as a result, and just write another covered call with a later date and potentially different strike price? Why buy back something you're going to effectively make defunct by changing its date? The only reason I can envision for buying back a covered call is if you intended it to expire unassigned, but now the underlying stock value is RISING and your call is threatening to make you lose the shares (which you don't want to do). Can you explain?
Thanks for your videos. It really slows the noise and open one's eye on the details of the roll process. Keep up the great job. will keep checking your channel
Great explanation how to get in, out, and roll covered calls. One thing to remember though is that if you close your covered call option early to gain a 50%-80% profit, that means that you will not receive the full premium given when you first sold the covered call.
Yep! You got it! 🙂
I love your videos Steve ❤
Thanks John!
Thank you so much steve working on gaining 100shares or apple so i can start doing option trades thank you for the great info always
On the same goal except I want to do it with google currently at 25 shares 75 more to go !
nice job
Amazing as usual. Always interested to go further into limit order with selling options.
Yes! I can talk more about limit vs market orders. Limit orders are an entire conversation around bid-ask spreads.
@@CalltoLeap Very cool 😎. Learn so much from this channel and always recommend it to others. 😀
Good presentation! Do you sell/buy contracts with trying (timing) to collect dividends too? If so, how about a video on how you would approach this strategy.
Hey Steve, I’ve been watching a lot of your videos lately and would love to see a video on a poor man’s covered call!
You got it! I can make a video on this!
Why would I buy back my call options if I am already getting the premium when they expire worthless and I plan to own the stock for a long time no mater the swings? I kinda understand the roll over and that may be the reason to continue to get sizeable premiums. But ... there to, if the stock drops in price, then rolling over the premium will also be less if you maintain the same strike price. There seems to be only two reasons, to buy back the shares because you realize it will go higher then the initial strike price or to get the hell out of the stock before it goes even lower. In either case the premium doesn't mater and not in favor (as I see it). Also some of these premiums are only 1-2 cents so that makes this all mute anyway.
Great video as always it would be helpful to discuss Delta and theta a little bit so we can see how the further options decay faster which is why I’m guessing you’re going further out. also, maybe discuss your thinking on how you chose the strike price at a certain Delta or such a percentage from the current strike price or what your methodology is there’s a lot of strike price and expirations
to choose from so the viewer has no idea why you chose these. Thanks!
Yes! I can talk more about Delta and Theta. Thanks for the rec! :)
Is there any platform that can practice paper trading before doing real trades? Want to have a hang of it first.
最高素晴らしい致します👍👍👍
what platform are you using that shows the information onscreen? Thanks
Hi. Can we use covered calls for residents in malaysia who bought etf?
If your position gets threatened by the rising stock price, do you roll it out, up or both? Or do you sell it at the strike and hopefully re-enter the position?
Thank you so much for your video, you opened a door for me to earn some passive income in my retirement. I have one question about selling cover call. If I sell a cover call at $10 which expire at the end of next month, from now and the end of the month, if the price goes higher than $10 in the middle of the contract, will my shares be called away on that date or at the end of the month?
Question: If you buy or sell AT MARKET or most recent trade are you not concerned slippage or a drastically different price may end up executed? If liquidity is an issues, for example, a huge gap may occur…and not always in your favor.
New to CC's your video's great. What if the option just expires? The premium has been recieved already? thanks
Thanks! Yep! You still get to keep the premiums!
It would be helpful if you explain to people that you were able to keep your premium minus the amount you spent to buy back the shares. Some people think you have to pay your entire premium back.
Would love to know more about rolling up and out to prevent options from being called away/exercised
You got it! It'll be a more intermediate video :)
I have 200 shares of a stock. I sold 2 calls. Can i exit the -2 contracts if i buy +2 contracts for the same strike price and expiration date and then close out my position of having to sell the stock i own? (Without rolling out, simply just retain my stock shares and keep any premiums i made without re-selling new contracts?)
What are covered calls
My question is if I were to buy back my covered calls would I still
Keep my premium that I originally got for selling my CC in the first place ? Hope that makes sense
Absolutely, you keep all the premiums
How to roll the contract when it become deep in money and showing negative $$$?
Why is the $725 premium you collected shown as a negative dollar value?
Same concept goes for selling cash secured puts right?
That's what I am wondering. I am almost it is the same. if you can lock in 70-90% profit early by buying back your puts, you might as well so you have more buying power to get more premium right?
What is the best strategy for selling cover which is much deep in the money! When the stock price going up a lot, and when it does not have new extended expiration date?
I usually like OTM calls but I can consider making a video on this too
Please do Robinhood tutorial video for beginners, this is too complicated.
A better video would be how were you able to buy 500 shares of Apple at such a young age? Funny you start with 2023 and ignore the bear market of 2022 when people lost all their stimulus money from the great printing in 2020.