Last update: July 2021
When you hold covered call trades, you don’t always want to simply get out. However, there are times you need to protect your risk on these positions. In this video, Tackle Trading’s Coach Tim explains when, how, and why a trader would buy a put option on a covered call position.
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]
Learn How to Repair a Covered Call Gone Bad!
Join Coach D for an in depth look at a dynamic Covered Call repair strategy on $GMCR.
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In this video tutorial, Coach T walks the team through how to set a basic stop on a covered call or naked put position.
Options 101: How to find the perfect Covered Call Candidate
In this video tutorial, Coach T from Tackle Trading walks through a research session for covered calls.
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In this video tutorial, Coach Matt goes through the latest edition of the Options Research Spreadsheet explaining how to use it to find the best stocks to cash flow.
Options 101: How to Add a Protective Put to A Covered Call
In this video, Tackle Trading’s Coach Tim explains when, how, and why a trader would buy a put option on a covered call position.
Tales of a Technician: The USO Covered Call Nerve Strike
I seem to have struck a nerve with my call for a reverse split in USO. And that’s a good thing.
Video Tutorial: How to Repair a Covered Call to Reduce Risk
Watch and learn as Coach D demonstrates how to roll a covered call down and out to offset risk and bring in more premium as he repairs a protective call write that has traded below the strike price and break-even price point.
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Just when I think I’ve exhausted my inventory of covered call insights I stumble upon yet another blog worthy concept. Today I’ll shine a light on how to identify the remaining profit in your trade, an essential skill for covered call management.
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How to Pick a Good Covered Call
In this article we will breakdown the philosophy, construction, and management of the Covered Call cash flow strategy.
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I think I could write about covered calls and naked puts every single week and still have plenty to say at the end of the year.
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I received an email the other day from a trader that bought a few stocks and has been selling covered calls against them. He had questions. I have answers. Here we go.
Options Theory: Combating Volatility with Covered Calls
Nothing like a monster “V” shaped reversal to get the juices flowing, am I right? Count me among those suffering whiplash over the market’s death-defying whoops and whirls of late. Yesterday was particularly annoying for those short delta toting traders like me.
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
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Traders have all sorts of rules and guidelines for managing covered calls that move in-the-money.
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The Covered Call strategy is an old friend of Tackle Trading. This strategy is so cool that we can talk about it every single day and still come up with new ideas.
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Portfolio Protection For Beginners [Free Articles]
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Everyone invests. Everyone has money. Currency is a form of investment since the gold standard was removed from the currency system.
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Tales of a Technician: A Trick for Financing Portfolio Protection
Come lear a Trick for Financing Portfolio Protection.
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Options Theory: Hedging Basic Series Part 1 – What is Hedging?
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Options Theory: Hedging Basic Series Part 2 – Why do Traders Hedge?
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Options Theory: Hedging Basic Series Part 3 – When to Place Your Hedge
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Options Theory: Hedging Basic Series Part 4 – How to Hedge a Naked Put
The way that you go about hedging varies depending on what your strategy is. Come learn how to hedge a naughty naked put.
Options Theory: The Protective Put
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Options Theory: VIX Spikes and Portfolio Protection
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Contrarians in a bear market seek signs of capitulation. Specifically, evidence that bulls are throwing in the towel and abandoning their once beloved positions.
Tales of a Technician: Of Legacies and Long-term Investing
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Options Theory: Protective Put Management
You have questions on how to protect a portfolio. I have some answers. You’ll find them here.
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3 Replies to “Options 101: How to Add a Protective Put to A Covered Call”
I like it, Tim! I needed to learn the collar trade for a couple of covered calls I have. They have earnings next week & now I’ll be ready!
Tim, question for you. If you buy the protective put right before earnings won’t that value of that put option after earnings go down because the volatility in the option decrease and you will lose a lot of value on the put you bought? (Volatility crush?).
Excellent video!
Kody – can happen, but it shouldn’t impact your decision to protect. The thing a trader needs to do before an earnings is use the risk graph so they can plot the P/L of the overall position if it goes up or down. Worrying about 1 component of the 3 isn’t the right mindset – think about the entire trade.
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