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The word “cash flow” is magical. Some traders, when they hear it the first time, go crazy. “Here, take my money! Teach me how to do it!”
If you are le chef de cuisine in your family, you know that some recipes require precision and others that do not. The Covered Call, if it was a meal, stays right in the middle. It requires some precision but not too much. There is room for flexibility.
Just like beans and meat, covered calls can be cooked with the pot lid closed, like a pressure cooker, or left semi-opened giving the pressure some room to escape. The former is the conventional Covered Call. The latter is the Ratio Covered Call. Here’s how it works:
Conventional Covered Call (pot lid fully closed)
+100 shares of a Tackle 25 stock
–1 OTM Call
At expiration serves 2 profits.
Ratio Covered Call (pot lid semi-opened)
+200 shares of a Tackle 25 stock
–1 OTM Call
At expiration serves 3 profits.
How do you prefer your Covered Calls, Sir/Ma’am?
Tonight’s Cash Flow Club will be, once again, fully dedicated to the Tackle 25 Covered Call system. Be sure to ask Coach Mark how this recipe works.
If you are not a Pro member yet but want to learn how to cook Covered Calls like a real chef, sign up for a 15-day free trial here.
Chart of the Day
Cooking Covered Calls
Video of the day
How to Prepare Covered Calls (with Theta Research Spreadsheet)
Tim, Cody and Noah work through the Tackle Trading Theta research spreadsheet for building out Covered Calls.
Today’s line up
Rookie Corner
Rookie Corner: Markets, Systems, and Conditions Part IV: The Trades Part 11
“Here we go again on our own!!!” Sorry, about the Whitesnake reference there, it just kinda popped into my head. That statement can be somewhat true when it comes to trading, typically we are on our own when we are placing trades, researching trades and just about every other aspect of trading but that is exactly why we have this blog and the Tackle community, it is so that we can collaborate together and bring a more rewarding experience to the game we so love!
Traders Lounge 11 PM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Cashflow Club 8:30 PM EST
Held every Thursday before Friday’s option contract expirations, this show helps you perfect your favorite cashflow strategies. Tonight, we will talk about The Tackle 25 Covered Call System.
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.
Market Recap
The Market Recap is designed to give you a quick overview of the day that was. While brief, this report is designed to cover all of the major events that drove the markets that day and help you plan for the trading day ahead.
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