Ep. 225: How To Find the Best Strike Price To Sell Covered Calls

What are the margin requirements when selling put options? In this podcast, I'll break it all down for you. By the end of the podcast, you should know EXACTLY what is required to sell put options and how options selling on margin works. Today we'll cover:What are Margin Requirements How do these requirements work How much margin is usually required Example for those with Tradier Why the broker requires so little capital The one-stop-shop software that helps YOU 

In this podcast, I'm going to explain the advantages and disadvantages of selling calls to collect additional premium BEFORE the expiration of your sold put. 

In this podcast I'm going to show exactly how I find the best strike price to sell covered calls on!Today's podcast will cover:Intro So you acquired shares How to compare strike prices Why a higher strike price may helpHow to calculate the % move of a stock Why you shouldn't choose the highest strike price The final decision Learn more about our Trading software, the Power X Optimizer: https://bit.ly/PXOTodayMy Trading Routine: https://go.rockwelltrading.com/my-trading-routine#StockMarket #OptionsTrading #TheWheelStrategyhttps://www.youtube.com/watch?v=UHy84SOGl4Y

 Learn how to buy back options to maximize your profits in today's podcast! Today's podcast will cover:Intro3 Steps To The Wheel StrategyReal Life ExampleYour 2 ChoicesAn Exception To This Rule...Learn more about our Trading software, the Power X Optimizer: https://bit.ly/PXOToday Learn when and HOW to roll a covered call to maximize your profits here: https://www.youtube.com/watch?v=Da3dXfOvmiQRecommended Links & Videos:The "Wheel" Strategy Explained: https://bit.ly/3ePN4qTHow To Fly Rescue Missions: https://www.youtube.com/watch?v=OlTD9h_ZNd8Wheel Book: https://www.rockwelltrading.com/the-wheel-options-strategy-book/Trading with Margin: https://www.youtube.com/watch?v=UHy84SOGl4Y My Trading Routine: https://go.rockwelltrading.com/my-trading-routineThe Wheel Strategy explained in 15 minutes: https://www.rockwelltrading.com/coffee-with-markus/wheel-options-strategy-explained-in-15-minutes/

Trading options during earnings announcements can be scary if you don't have a plan. Learn how to trade options during earnings season in this episode. 

There's a huge difference between stop and limit orders, and if you use the wrong order, you might lose a lot of money. Every trader needs to know the difference between stop and limit orders, and in this podcast, I will explain the difference.

In this podcast, you'll learn how to set up the popular TradingView App with the indicators and bar coloring that you need in order to trade the PowerX Strategy by Rockwell Trading.Get setup with TradingView here: https://tradingview.go2cloud.org/SH4FCSchedule a Demo for The PowerX Optimizer Software: https://mytradingroutine.com/

Short Selling Put Options is a fun strategy IF you know what you are doing.In this podcast, I'll show you my strategy for short selling put options and a live example.

he Poor Man's Covered CallQuestions we’ll answer:What is itWho is it forWhen to use itThe Poor Man’s Covered Call is a very specific type of spread.  As you know we’ve been covering option spreads for several Coffee With Markus Sessions. We have an entire playlist discussing the pros and cons of each type of options spread. In this video, we’re discussing the difference between trading stocks, covered calls, and the poor man’s covered call. Trading StocksLet’s take a look at trading stocks first. Let’s say that you’re bullish on a stock like Boeing. You might purchase a decent amount of stock, let’s say 100.  Right now this stocks strike price is $180.  If you purchased 100 shares of Boeing, at $180 dollars each, this would require $18,000 in purchasing power. If the stock increases by 10 dollars, to $190, you stand to earn $1,000 in net profit.  So you’ve risked $18,000 to earn $1,000. Trading Covered CallsIn this example, let’s say that you’re still bullish on Boeing. And in the short term, you expect an upward movement in price. Since you already own the 100 shares of Boeing stock, you can sell a $200 Call Option against these shares. If the stock price increases to $190 like you expect, you’ll earn an additional $450 on top of the $1,000 you’ve already earned. If we see a decrease in stock price, the covered call acts as a hedge. In this example, if we saw a downward movement to $170 you would lose $1,000.  But because you sold a 200 Call option contract and received a premium of $450, your net loss would only be $550. Poor Man’s Covered CallWhen would you trade a Poor Man’s Covered Call? When you don’t have the $18,000 to buy 100 Boeing shares!  When do you trade a covered call? When you expect the stock to stay above the current price and move slightly higher. Instead of buying a stock, you would purchase a deep in the money call option at a later expiration. When looking for a call option deeper in the money, we’re trying to find one with a Delta of 0.95. This means for every dollar the stock moves, the call option is gaining .95 cents in value. We’re buying a deep ITM call at $71 which means the capital required to take this position is only $7,100. As you can see this is a fraction of the price to purchase the stock outright. At the same time, we will sell the 200 Call option. Similar to the covered call. But instead of owning the stock at a price of $18,000, we purchased the ITM call option and sold a 200 call option.  if the underlying stock price moves from $180 to $190 you would make $1335 because the Delta is 0.95 which means it’s only increasing 95% of the value. The profit on this type of position isn’t as high as a covered call, but it’s much more than owning the stock outright, with much less risk and less capital. 

When trading the Wheel Options Strategy, do you ever worry about assignment risk? In this podcast I will briefly explain the Wheel Strategy, and then give you 3 solutions if you're worried about assignment risk.Recommended Links & Videos:The "Wheel" Strategy Explained: https://bit.ly/3ePN4qTHow To Fly Rescue Missions: https://www.youtube.com/watch?v=OlTD9...Wheel Book: https://www.rockwelltrading.com/the-w...Trading with Margin: https://www.youtube.com/watch?v=UHy84... My Trading Routine: https://go.rockwelltrading.com/my-tra...