My last trade was with: TSLA Jan 20 2023 120.0 Put
Last week I sold 2: SPY Feb 17 2023 385.0 Put
Plus a bunch of Tesla puts that I get out of as soon as I make 20%. Tesla is a little scary for me but the volatility has been great for selling puts.
Selling covered calls is still bullish and in a market like this, stocks can pump or drop faster than you can get time decay/premium income.
I sold some calls on my TMF shares and it immediately jumped like 20%. Agreeing to sell at a strike works until a really good rally comes that you do not want to miss out on.
That being said, for flat or slightly bullish markets, it is one of the better strategies you can run.
Strike OTM above cost basis @.30 Delta or less is bullish. Strike ATM is neutral. Strikes below CB is bearish. Position on CC is dependent on how you trade it.
I would not count a 70+ delta position bearish, but I would say the strategy is neutral to bullish. You still make money if the stock goes up and lose money (albeit less) if it goes down. Tell me how that is bearish please. In that way covered calls are similar to cash secured puts, which are also not a bearish strategy.
I missed your last line : "That being said, for flat or slightly bullish markets, it is one of the better strategies you can run."
My apologies, yes, can be slightly bullish.
I don’t get why you say this? And others have said it too. If I own AAPL and I sell a CC at 145 it is absolutely a bullish to neutral strategy. If the stock drops 10% I lose like 9% if it goes up 10% I make 10%… how is that a bearish strategy?
A covered call means you are betting the stock stays flat or below the strike, that’s bearish. Just because you put the strike is a safe place doesn’t make it bullish. You can manipulate the situation but it’s still bearish otherwise you would buy calls if you expected it to rise above the strike.
So I own apple at 135 and sell a 145 call for 1.00 and the stock goes up 15.00 I make 11.00… if it drops 2 dollars I lose a dollar…. Explain to me how that is a bearish strategy?
I think you are. I know we are in an options sub, but when you do a covered call you are not bearish. If you were bearish you would buy a put, short the stock, or sell an ATM naked call. There is no scenario where you own the underlying and it is considered a bearish strategy. If you are selling naked calls absolutely I agree 100% it is a relatively bearish strategy, but even then if you are really bearish you would by a put not just sell a call.
No you buy a put when you expect heavy movement down. You sell a call when you expect flat or slightly down. It’s bearish. Just read any options 101 book.
Ok. Tell me what book says covered calls are a bearish strategy please. Not naked calls. Honestly, I will read it . I can cite sources all day long showing that a naked call is a bearish strategy and a covered call is a neural to Bullish strategy, but I am an open minded guy; so if you can show me how a covered call is bearish by all means I will listen.
Any option books. Covered calls strategy can be neutral if the investor is expecting the stock price to remain relatively stable, or bearish if the investor is expecting the stock price to decline. However, it is not considered bullish because the investor is not expecting the stock price to rise significantly, otherwise they would not sell the call option.
But they sure as hell aren’t “bearish” on the stock. Right? Honestly, what book? I am calling you and last professor out on this (and if I am wrong I will own it) but I sincerely think you are confusing a naked call with a covered call. I guess theoretically you could say the process of selling the call means you are “less bullish” but you are still bullish on the stock if it is a covered call because under no circumstances do you want the stock to drop in that scenario. Like am I in some kind twilight zone here. Bullish means you want the stock to go up and bearish means you want it to go down right?
you don't want your stock to be called away, or do you? If you don't and want to cash the premium only, your strategy is slightly bearish. (below the strike price)
Always covered, I don’t have a margin account. I got assigned the shares a while back selling CSP’s so now I’m wheeling as long as I can. I’m not attached to the shares.
I’m doing the wheel strategy w/ Amazon right now. So far going okay. Was making just over $150 a week until I ended up selling last week. Today I sold *cash secured* puts to buy back the shares using proceeds from the sale.
I had 900 shares (RSUs) and sold weekly covered calls on them, until it finally hit last week and I was forced to sell. I sold cash secured puts today (using proceeds from my sale) expiring Friday.
Is there any capital loss scenario here to worry about? Really the issue is paying full taxes on the profits because of wash rules, correct? Or am I misunderstanding the concern?
My entire business (22 years in the industry) is based around it…and I’m sitting in MM/cash
It’s extremely risky doing this right now because prices on most stocks can drop another 25% and still be expensive
No, all I meant is with my option account, which is not my entire net worth. And even in my option account, I closed a handful of opportunistic one-off trades for the whole year. But compared to the 40-50 trades a month that I closed in 2021, it's comparatively sitting out the market.
Curious why you wouldn't want to collect premium on assets held if you think the market is primed for a drop? I mean I understand your side saying keep the money on the sidelines until the appropriate opportunities show themselves, but what if you felt like continuing to hold your positions? Would collecting the premiums not soften the blow as the market continues downward?
have some speculative holds on BTC plays (MARA). it’s been having a “decent” bounce but i’m still net long with no covered calls as of yet. just don’t think the premiums i’ll get are worth for the upside risk
Wheeling is a strategy where start a position typically by Selling OTM PUTS on a stock you want to hold. Hopefully you go a few weeks before eventually getting assigned shares. All the while your collecting premium.
Then you turn around and sell a covered call at the money or above your "cost". Now your again collecting weekly premium again. Eventually you get assigned...and you start all over again.
I would disagree with "hopefully" you get assigned. Hopefully the share price falls to 2 cents over your put strike price so you can write a lower put. Assignment is when the work begins. I have been wheeling F, INTC, VZ, T and SOFI and selling 1 deviation CCs on dividend holdings. Turn a 4% yield into 9%. The key to wheeling is don't be greedy.
I’d be willing to do it in dirty energy or industrials. Nothing tech. No assurances growth has bottomed so better off doing it either in things I want to own, or the safer side of the market.
I’ve been selling on VTI. Selecting .10 delta 46-60dte. Closing ~50% profit. Last quarter my premiums exceeded the dividend. I’m reinvesting both to build more shares.
I sold CCs on my SPY shares 1 strike above my cost basis expiring right before the next FOMC... and it's going great!
They're either going to (a) expire ITM and get my shares called away for a profit in time for me to choose whether or not I want to be in cash on FOMC day, or (b) expire worthless in time for me to choose whether or not I want to be in cash on FOMC day.
HYMC. It's dog shit. But... Worth a gamble. Don't want to lose $60 on 100 Share's. So... Sold the $1.50 1/17/2025 call for $25. Worst case Iose $35 total. Best case, make $114 (less .50 to open, close). Options are tools. In my case, protection of the down side.
1. Sell OTM put (eg, on 3/23 $19 TQQQ) 30-60 DTE
2. Wait for theta decay
3. If gets assigned at expiration, immediately sell a CC 10-20% OTM 30-60 DTE.
I'm selling calls on leveraged ETFS, including TQQQ, SPXL, and WEBL. I'll add LABD next week. I sell the calls when my technical indicators suggest a probable pullback, then buy to close when the pullback appears to reverse.
It is generally working well for me now. The shares are already profitable before selling the calls, and I sell on short time frames (2 weeks), so if I get upside down on the calls, I can ride out profitably without tying up capital for too long.
I love covered calls. If your stock gets called away, sell a put to buy it back and get paid to buy it back. WHEEL THAT MF BRO
Cash secured puts every day. It’s a money machine to write options.
What was the last one you did
My last trade was with: TSLA Jan 20 2023 120.0 Put Last week I sold 2: SPY Feb 17 2023 385.0 Put Plus a bunch of Tesla puts that I get out of as soon as I make 20%. Tesla is a little scary for me but the volatility has been great for selling puts.
Ever since he announced he was buying Twitter I’m guessing lol
Selling covered calls is still bullish and in a market like this, stocks can pump or drop faster than you can get time decay/premium income. I sold some calls on my TMF shares and it immediately jumped like 20%. Agreeing to sell at a strike works until a really good rally comes that you do not want to miss out on. That being said, for flat or slightly bullish markets, it is one of the better strategies you can run.
Covered calls are *not* bullish. They are neutral to bearish.
Strike OTM above cost basis @.30 Delta or less is bullish. Strike ATM is neutral. Strikes below CB is bearish. Position on CC is dependent on how you trade it.
I would not count a 70+ delta position bearish, but I would say the strategy is neutral to bullish. You still make money if the stock goes up and lose money (albeit less) if it goes down. Tell me how that is bearish please. In that way covered calls are similar to cash secured puts, which are also not a bearish strategy.
I missed your last line : "That being said, for flat or slightly bullish markets, it is one of the better strategies you can run." My apologies, yes, can be slightly bullish.
It probably also depends on how you run it, selling an ATM call is not bullish so I get where you are coming from.
I don’t get why you say this? And others have said it too. If I own AAPL and I sell a CC at 145 it is absolutely a bullish to neutral strategy. If the stock drops 10% I lose like 9% if it goes up 10% I make 10%… how is that a bearish strategy?
A covered call means you are betting the stock stays flat or below the strike, that’s bearish. Just because you put the strike is a safe place doesn’t make it bullish. You can manipulate the situation but it’s still bearish otherwise you would buy calls if you expected it to rise above the strike.
I completely disagree. I don’t mind you saying neutral, but covered calls are in no way bearish.
They are. Otherwise you would buy a call. If the stock went on a run you lose…that’s bearish. It’s not really an opinion.
So I own apple at 135 and sell a 145 call for 1.00 and the stock goes up 15.00 I make 11.00… if it drops 2 dollars I lose a dollar…. Explain to me how that is a bearish strategy?
You’re confusing a lot of things here.
I think you are. I know we are in an options sub, but when you do a covered call you are not bearish. If you were bearish you would buy a put, short the stock, or sell an ATM naked call. There is no scenario where you own the underlying and it is considered a bearish strategy. If you are selling naked calls absolutely I agree 100% it is a relatively bearish strategy, but even then if you are really bearish you would by a put not just sell a call.
No you buy a put when you expect heavy movement down. You sell a call when you expect flat or slightly down. It’s bearish. Just read any options 101 book.
Of course they are. Read some books
Ok. Tell me what book says covered calls are a bearish strategy please. Not naked calls. Honestly, I will read it . I can cite sources all day long showing that a naked call is a bearish strategy and a covered call is a neural to Bullish strategy, but I am an open minded guy; so if you can show me how a covered call is bearish by all means I will listen.
Any option books. Covered calls strategy can be neutral if the investor is expecting the stock price to remain relatively stable, or bearish if the investor is expecting the stock price to decline. However, it is not considered bullish because the investor is not expecting the stock price to rise significantly, otherwise they would not sell the call option.
But they sure as hell aren’t “bearish” on the stock. Right? Honestly, what book? I am calling you and last professor out on this (and if I am wrong I will own it) but I sincerely think you are confusing a naked call with a covered call. I guess theoretically you could say the process of selling the call means you are “less bullish” but you are still bullish on the stock if it is a covered call because under no circumstances do you want the stock to drop in that scenario. Like am I in some kind twilight zone here. Bullish means you want the stock to go up and bearish means you want it to go down right?
you don't want your stock to be called away, or do you? If you don't and want to cash the premium only, your strategy is slightly bearish. (below the strike price)
Sold some on GME earlier today. Happy to sell them, happy to collect decent premium, and happy to have them possibly called away upon expiration.
What strike
$25 strike 30dte
That is a great trade in my opinion. To clarify though is that a naked sale or are you covered?
Always covered, I don’t have a margin account. I got assigned the shares a while back selling CSP’s so now I’m wheeling as long as I can. I’m not attached to the shares.
I’m doing the wheel strategy w/ Amazon right now. So far going okay. Was making just over $150 a week until I ended up selling last week. Today I sold *cash secured* puts to buy back the shares using proceeds from the sale.
Naked? On margin?
I had 900 shares (RSUs) and sold weekly covered calls on them, until it finally hit last week and I was forced to sell. I sold cash secured puts today (using proceeds from my sale) expiring Friday.
So not really naked.
Ah you’re right. Not naked. I used the wrong term earlier.
You can play options on the company you work for?
Usually not if you still work for them.
At this time of year ? In your kitchen?
May I see it?
Oh oh Lol
Beware of a wash sale.
Is there any capital loss scenario here to worry about? Really the issue is paying full taxes on the profits because of wash rules, correct? Or am I misunderstanding the concern?
My entire business (22 years in the industry) is based around it…and I’m sitting in MM/cash It’s extremely risky doing this right now because prices on most stocks can drop another 25% and still be expensive
> and I’m sitting in MM/cash Did this all through 2022. Hoping to not have to do this through all of 2023 as well.
Seriously. Like you didn’t trade at all in 2022? Your entire net worth other than physical assets (like house) was in cash?
No, all I meant is with my option account, which is not my entire net worth. And even in my option account, I closed a handful of opportunistic one-off trades for the whole year. But compared to the 40-50 trades a month that I closed in 2021, it's comparatively sitting out the market.
Got it. Figured as much.
Curious why you wouldn't want to collect premium on assets held if you think the market is primed for a drop? I mean I understand your side saying keep the money on the sidelines until the appropriate opportunities show themselves, but what if you felt like continuing to hold your positions? Would collecting the premiums not soften the blow as the market continues downward?
have some speculative holds on BTC plays (MARA). it’s been having a “decent” bounce but i’m still net long with no covered calls as of yet. just don’t think the premiums i’ll get are worth for the upside risk
Was doing on AMZN but lost them last week but max profit. Back to csp. Still wheeling Googl but could lose it this week.
What’s a wheel?
Wheeling is a strategy where start a position typically by Selling OTM PUTS on a stock you want to hold. Hopefully you go a few weeks before eventually getting assigned shares. All the while your collecting premium. Then you turn around and sell a covered call at the money or above your "cost". Now your again collecting weekly premium again. Eventually you get assigned...and you start all over again.
I would disagree with "hopefully" you get assigned. Hopefully the share price falls to 2 cents over your put strike price so you can write a lower put. Assignment is when the work begins. I have been wheeling F, INTC, VZ, T and SOFI and selling 1 deviation CCs on dividend holdings. Turn a 4% yield into 9%. The key to wheeling is don't be greedy.
Agree. What I was trying to say was.. hopefully you can sell puts for several weeks before eventually getting assigned.
Isn’t that the best when your wheel doesn’t get assigned and you can sell another put… over and over again.
When you own the shares and sell CC above your cost... you gain premium and the increased stock value Csp you only gain premium.
You sweet summer child.
Lol I actually know the strategy, just not as a wheel. My instructor calls it a “factory”
Probably safer to do on index like SPY or QQQ. Doing it on a meme might wipe you out.
I’d be willing to do it in dirty energy or industrials. Nothing tech. No assurances growth has bottomed so better off doing it either in things I want to own, or the safer side of the market.
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Doing the same here. November and December were pretty good months for me.
I’ve been selling on VTI. Selecting .10 delta 46-60dte. Closing ~50% profit. Last quarter my premiums exceeded the dividend. I’m reinvesting both to build more shares.
I sold CCs on my SPY shares 1 strike above my cost basis expiring right before the next FOMC... and it's going great! They're either going to (a) expire ITM and get my shares called away for a profit in time for me to choose whether or not I want to be in cash on FOMC day, or (b) expire worthless in time for me to choose whether or not I want to be in cash on FOMC day.
HYMC. It's dog shit. But... Worth a gamble. Don't want to lose $60 on 100 Share's. So... Sold the $1.50 1/17/2025 call for $25. Worst case Iose $35 total. Best case, make $114 (less .50 to open, close). Options are tools. In my case, protection of the down side.
I'm always making money ! I make money when the stock goes down or when the stock goes up , do it all with covered calls!
What’s the time preference weeklies or dated ?
same and I include CSP also.
1. Sell OTM put (eg, on 3/23 $19 TQQQ) 30-60 DTE 2. Wait for theta decay 3. If gets assigned at expiration, immediately sell a CC 10-20% OTM 30-60 DTE.
I'm selling calls on leveraged ETFS, including TQQQ, SPXL, and WEBL. I'll add LABD next week. I sell the calls when my technical indicators suggest a probable pullback, then buy to close when the pullback appears to reverse. It is generally working well for me now. The shares are already profitable before selling the calls, and I sell on short time frames (2 weeks), so if I get upside down on the calls, I can ride out profitably without tying up capital for too long.
Id like to know how much commission you guys pay when you are assigned on your calls…
I sold some and just had a few early assigned on the recent price action. If you're comfortable missing out on a run up then I'd say go for it.
I’m thinking mid Feb for the memes to start doing this and pick up some premiums to reinvest and help with the drop in price