≈ 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.

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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.

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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.

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Today’s line up

Rookie Corner

Markets, Systems, and Conditions Part IV | The Trades Part 6

If we do a trade with an 80% probability of success and we do that same trade 10 times then it is possible that we could have 10 losing trades in a row but if we so that same trade 10000 times in a row then the distribution will come closer to that 80% winning mark.

Traders Lounge 11PM 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 8:30PM EST

Held every Thursday, this show helps you perfect your favorite cashflow strategies.

Halftime Report 12:30PM 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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