10 Minute Read

Commodity Report #29 – Selling Calls on Commodity ETF’s

November 30, 2015

By | 20 Comments

Tackle 25 Covered Calls Premium System. Covered Calls are ideal for your IRA and can help you compound those gains and generate cashflow. Click on the image to get this premium trading system right away.

Last update: July 2021

In episode #29 of the Commodity Report, Coach T walks the team through how, when and where to sell a call option on an ETF if you get assigned. Check out in the video below.

Notes from the video

  1. Always watch the video and take notes. Post your questions in the Clubhouse.
  2. If you are assigned from a Naked Put trade you can turn that stock position into a Covered Call for cashflow.
  3. Selling calls at 30 days and OTM (near .40 delta) will keep you at near Maximum Cash Flow potential.
  4. 1 Contract sold will convert to 100 shares assigned. Make sure when you trade naked puts you can afford the stock assignment.
  5. Traders have a different mind-set than Investors. Identify the type of position you’re building and set your rules accordingly.
  6. Use the TTOS spreadsheet to keep you organized when building cashflow spreads.
  7. Using the Extrinsic Value column is a very helpful calculation for a cashflow trader – especially when rolling call options.
  8. When rolling options, you can buy the call back and sell the new call in separate orders or do them concurrently through a rolling order.
  9. Calculating Extrinsic Value as a % of Stock Price gives you important information regarding remaining cashflow.
assignment on naked puts

Tackle Trading Resources on Covered Calls

Continue learning about this powerful options trading strategy: the Covered Call. Tackle Trading has all the resources you need to MASTER this strategy like a PRO.

Covered Call For Beginners [Free Articles]


Options Theory: Collaring Earnings

Earnings season is upon us. Whether it’s a straight stock position, you’re holding for the long run, or one that you’re selling covered calls on there is a straightforward way to limit your risk.It’s called a collar.

Read More »

Tackle Today: Do you trade Covered Calls?

Last update: August 2021 ≈ Cash Flow and Growth ≈ I put a poll question in the clubhouse recently asking the Tackle Trading community a simple question: Do you trade Covered Calls? If you haven’t answered the question yet, you still can HERE. Of the 5 potential answers, the breakdown was interesting. 38% said YES

Read More »

Portfolio Protection For Beginners [Free Articles]

bear market survival guide

Long Put: IWM or RUT

In this video tutorial, Coach Matt walks thru how he has been handling the additional macro risk in the market by trading Long Put options on the IWM.

Read More »

Trading Journals

Good traders keep excellent records. Quality trading journals are essential to your progress and growth as a trader and keeping good records will help you learn more from both your income and expense trades.

Learn more about HOW the Tackle Trading Journals can help you become a professional trader.

Reports [Premium Content]

The Weekly Premium Reports are a part of the PRO subscription.

Tackle Trading Playbook [FREE for PRO Members]

PRO Members now have unfettered access to the Tackle Coaches’ personal playbook containing thirty-one powerful trading strategies categorized according to the Options Greeks. Bullish, bearish, or neutral market conditions, this Playbook will help you dial up the right call more often and with greater confidence.

Tackle Trading: Financial Freedom is a Journey. Sign up now for a 15-day free trial.

Financial freedom is a journey

Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.

Legal Disclaimer

Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.

All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.

20 Replies to “Commodity Report #29 – Selling Calls on Commodity ETF’s”

  1. RobertWhitaker says:

    Thanks for the great information Coach!

  2. Bill Trimborn says:

    Another great Commodity Corner, Tim! I’m making adjustments to my covered call system tonight thanks to your simple, straightforward teaching!

  3. Tim Justice says:

    You guys are very welcome! I love doing these reports.

  4. Adam Barr says:

    Great report Tim.
    I have a question on USO I have some shares that I got put at $15.00 and I have been selling calls on it for a couple months now. Haven’t been called out yet. Looking at rolling into the DEC5 13.50 calls. What happens if the stock moves up past 13.50. should I roll at a loss or get called out and rebuy it to keep selling calls. As of now if I get called out it would be a small loss.

    I hope I explained that so it makes sense.


  5. MatthewMcQueary says:

    Another great video Tim. The extrinsic value rule for rolling makes this fairly simple strategy even simpler. Thanks again

  6. Wow, what a great report! Loving this new approach.

  7. PaulButtars says:

    Hi Tim this is very useful, just one question when your covered call is in the money, your saying only roll it if the extrinsic value is 1% of the stock price, no matter what the option price is?

  8. Tim Justice says:

    That’s right Paul.

  9. JoanNee says:

    Love it Tim, thanks! Does one bend the rule of going out 30 – 60 days when rolling a call if the next strike out is longer than 60 days? For example, my Jan USO call is less that 1% of stock price and I’d have to roll out to April now (no weeklys listed yet). Go for it?

  10. Tim Justice says:

    In that case Joan, you would probably roll down to pick up more extrinsic value and stay in January.

  11. Kody Potter says:

    I have the same question as Adam Barr did above. Is the solution or fix that you should have rolled earlier before it went deeper in the money?
    Thanks Tim!

  12. Tim Justice says:

    If it moves in the money, and the extrinsic value is drained, you should roll it at a loss if you don’t want called out. This is to maximize theta and cash flow.

  13. Kody Potter says:

    Thanks Tim, for the help and explanation.

  14. Adam Barr says:

    Thanks Tim

  15. Pingback: | Tackle Trading

Comments are closed.

Chart Modal

Tackle Trading

Book a FREE Consultation

Sign up for a free consultation to build your Educational Plan.