≈ Consider the Perks. ≈
Traders,
Covered calls are a gateway strategy into the wide world of options trading. They offer a host of advantages that we will dig into over the next week of messages. Allow me to provide a preview of the perks.
① Selling Calls Generate Cash Flow
Selling calls allows you to get paid for a promise. The premiums you collect are yours to keep and can generate income in dull markets.
② Covered Calls Reduce Volatility
Stocks are the ultimate roller coaster. They rise to dizzying heights, yes, but also dive into the depths. If you seek a smoother, gentler ride, then try covered calls.
③ Covered Calls partially hedge risk
Any money received by selling calls offsets small losses in the stock. Thus, covered calls partially hedge your risk.
④ Option Premium Elevates Probability of Profit
Collecting premium reduces your cost basis or breakeven level in the stock. This means you can profit even if the shares stagnate or fall slightly.
⑤ With Covered Calls, You Gain Control
Once you understand the power behind covered calls, you can better control your stock positions’ risk and reward potential. Having the ability to exert some influence over your investment provides a psychological boost and makes it easier to hold stocks for the long run.
🛑 Upcoming Webinar: Covered Call for Beginners › What is a Covered Call and how to trade it? ›› December 6th 2021, 8:30 PM EST
Join Tackle Trading in this upcoming Trading For Beginners webinar on the basics of this powerful options strategy: the Covered Call. Covered Calls is a great way to increase your monthly income derived from your Investment Portfolio. In this webinar, Coach Matt will go through what the Covered Call is and how to trade it.
Click on the button below to go to YouTube and set a reminder so you won’t miss it when Coach Matt goes LIVE.
Chart of the Day: CBOE S&P500 Buy Write 2% OTM Index ($BXY)
Did you know there are strategy benchmark indexes just like regular stock indexes? The CBOE publishes data on over a dozen of them. Today we’re featuring BXY, which tracks a position that owns the S&P 500 while selling monthly 2% OTM call options. Analyzing these indexes can help you better understand how a strategy performs over time.
Video of the day: How to Prepare Covered Calls (with Theta Research Spreadsheet)
Coaches Tim, Cody and Noah work through the Tackle Trading Theta research spreadsheet for building out Covered Calls.
Today’s line up
Traders Lounge 11 AM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day, and fun in a way that only Matt and Tim can deliver.
Weekend Reports
Watch the Stock, Options, Commodity, and Forex Reports to help you prepare for the week.
S.T.E.P. Swing Trading MasterMind Group 8:30 PM EST
Make sure to attend the Monthly S.T.E.P. System Mastermind Group and learn directly from our experienced coaches and see for yourself exactly how to apply the S.T.E.P. system discipline in the current market conditions.
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