≈ All night long. ≈

The Covered Call strategy is considered a safe play because it is a covered trade.

What that means is if the short call is in-the-money at expiration you will have to sell your shares. No problem, you have the ammo to do so. Imagine those who don’t. Short calls can destroy your account but if you are covered—i.e. not naked—, you are not committing any sin.

That doesn’t mean this strategy does not have its moments.

“Keep your eyes on the road, 
Your hands upon the wheel.”

The stock you are selling calls against can go up, sideways or down. It is the downward movement that can get you in trouble.

“Keep your eyes on the road, 
Your hands upon the wheel.”

Say you’ve entered a Covered Call position on an ETF that is trading at $43 and sold the 30 DTE $43.5 calls for $0.70.

“Yeah, we’re goin’ to the Roadhouse”

Mr. Trump wakes up determined to shake the hell out of the bluebird. He tweets. The ETF you are holding is highly sensitive to temper tantrums. It falls.

“We’re gonna have a real
Good time.”

You are now making money on the call but losing on the stock. What are you going to do?

“Let it roll, baby, roll.”

How far should you roll the calls and keep losing on the stock?

“Let it roll, baby, roll.”

Now you are selling calls at a strike below your BEP. How to proceed?

“Let it roll, baby, roll.”

Attend tonight’s Cash Flow Club with Coach Mark because this is exactly what he is going to talk about.

“Let it roll, all night long.
Do it, Mark, do it.”

Chart of the Day

Let it roll, baby, roll.

How far should you keep this trade on, rolling the calls down and out? Attend tonight’s Cash Flow Club to learn how to properly manage this type of situation.

Video of the day

What is a Covered Call

A covered call is a combination strategy in which the trader buys stock in increments of +100 shares and then sells -1 call option contract for each 100 shares of stock.

Today’s line up

Rookie Corner

Broker Madness Part 1

We are changing the blog up a bit for the next few weeks. Here at Tackle Trading, we are blessed to have so many fine folks in our community and everyone has a different trading style and a different set of challenges on their road to successful trading.

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, Coach Mark Justice will be discussing Covered Calls.

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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