Tackle Today: How to Generate Cash Flow with Covered Calls | Tackle Trading: The #1 rated trading education platform

Tackle Today: How to Generate Cash Flow with Covered Calls

Tackle Today How to Generate Cash Flow with Covered Calls

Covered Call Perk #1.

Traders,

Cash flow strategies profit from the passage of time. In greek-speak, they are known as positive theta positions. Covered calls might be the most popular cash flow play of them all. Recall that the trade involves selling call options against your stock position. When you sell the call, you are obligating yourself to sell your stock at a set price. In exchange for bringing on the obligation, you get paid a premium that is yours to keep.

In situations where the stock stagnates, declines, or rises slightly, the call expires, and you have the chance to sell another one. As you do this month to month, cash flows into your account that otherwise wouldn’t have.

For this reason, we say that covered calls allow the stock owner to generate cash flow. Take Camping World (CWH), a stock on our Tackle 25 list, as an example. You can buy the stock for $44.75 and sell the 32 day, $47 call option for $1.75 per share ($175 total). You’re promising to sell the stock at $47, yes, but you also generated $175 in additional cash flow over the next month for your troubles.

#TeamTackle

🛑 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: Camping World Cash Flow Potential

Chart of the Day: Camping World Cash Flow Potential ($CWH options chain)

Here’s the options chain for CWH call options that expire on December 31st. The premium available in each strike price represents the varying amounts of cash flow you can generate.


Video of the day: Gino’s Gems – Choosing Your Options Trading Strategy

Coach Gino teaches how to choose your options trading strategy in today’s Gino’s Gems.


Today’s line up

Tales of a Technician: Taking Stock

Here’s my take on the market after Monday’s rebound. We’re starting to see some significance divergences out there. More technical analysis in my video.

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.

The Coaches Show 8:30 PM EST

This is our weekly MasterMind group. Join the coaches tonight, 8:30 PM EST to discuss the markets and help you prepare for the week.

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.


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.


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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.

2 Replies to “Tackle Today: How to Generate Cash Flow with Covered Calls”

  1. annematunda says:

    Hello,
    am looking for the archive where Gino’s Gems – Choosing Your Options Trading Strategy is stored.
    Thanks
    Anne

Comments are closed.

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