≈ Are you out of your mind? Yes. ≈
Did you know that you can sell ITM calls as a profitable cash flow strategy and also to gain some downside protection in case the stock price falls?
Yes, such a strategy is called Protective Call Write. Sounds fancy but in essence, it is just the regular covered call but instead of selling an OTM call you sell an ITM one.
— “WHAT! Where’s the unsubscribe link? Don’t send me that nonsense ever again! If you sell an ITM call the shares will be taken away from you!”
I remember I first heard about selling ITM calls from Coach Gino on a Cash Flow Club, way back in 2015. My head was not only spinning but I was stroke by this same get-me-out-of-here-stop-with-this-nonsense feeling. Gino, I am sorry.
Usually, the first ITM strikes have TONS of extrinsic value, so you are not going to be called away just because you sold an ITM call.
You can use this strategy if you are expecting the stock price to fall, hence, giving you some downside protection, or as a cash flow play due to the juicy premiums that the ITM strikes contain, which greatly reduce the cost from the purchase of the shares.
Obviously, there is much more to this strategy, and that is precisely why you should attend today’s Cash Flow Club (PRO only). Coach Gino “The Talent” Poore will walk you through the wonders of the Protective Call Write from the new Tackle Trading Playbook.
Not a PRO member yet? Sign up here and attend the webinar.
Chart of the Day
Protective Call Write Risk Graph
This is the risk graph (an illustration for educational purposes) of the Protective Call Write strategy. It looks the same as the Covered Call one because they are, in essence, the same strategy. Neutral to bullish Theta strategy with limited gains and limited losses (although substantial).
Attend the Cash Flow Club tonight to learn more about this strategy.
Video of the day
What is a Protective Call Write
The Protective Call Write is a bread and butter trade that will absolutely change the way you think about stock positions both long and short term.
Today’s line up
Rookie Corner
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