What if I sell covered calls WAY below my cost basis for extra premium and repurchase the 100 shares as soon as they get called away? If they do get called away. Is that good idea 💡?

@@thomasd5488 Thank you. Excellent info.

@@pazuzuxx I think that would be considered a wash sale if you repurchased the shares at a lower price after they were called away.

@@pazuzuxx "Is that good idea" One strategy that MOST KZfaqrs DON'T teach, is how to safely sell a covered call that has a strike price WAY below your cost basis, AND still avoid assignment, so you don't have a REALIZED capital gains loss. You already have a paper loss because the share price has already fallen way below your purchase price. If you own a stock with a cost basis of $100 and the stock price has fallen to $70 through no fault of the stock fundamentals, but was pulled down with the rest of the bear market, it will eventually recover. If it is a dividend stock, you at least will earn the dividends while waiting for the share price to recover. If you want more return on your capital than just the dividends, then you CAN sell a call, WAY BELOW your cost basis, so you can earn a decent premium. I don't have a specific stock to show as an example, so I'm going to throw out some hypothetical numbers. You sell a covered call with the $72 strike price, with a 5 day expiration, for $0.40, or $40 per contract. That is an annualized ROI of 40.5% Assuming you could repeat this 52 weeks in a row. Nothing is ever that easy. On Thursday, the stock price has rallied to $75 and your $72 CC is 'in the money' and if you let it expire, you will only be paid $72. Not what you want. On Thursday, before the market closes, roll the CC strike price up to $73 and out to an expiration date that will earn you a small net credit. You get PAID to BETTER your position, and avoid assignment. IF the CC is STILL 'in the money' on the Thursday before expiration day, roll the strike up to $74, and out to an expiration date that will earn you a small net credit. AGAIN, you got PAID to BETTER your position, and avoid assignment. Even if the stock sits at $75 per share for a year, you can earn HUGE weekly premiums, by selling 'at the money' strikes. As long as the CC is STILL 'in the money' on the Thursday before each new expiration day, just keep rolling up one strike, and out to a far out enough expiration, to earn a net credit. Rinse and Repeat, over and over, even after the stock price, and your strike price has risen above your purchase price. As a matter of fact, even after the CC strike price, and the share price are ABOVE your cost basis, or purchase price, IF you are a BUY and HOLD dividend stock INVESTOR, that likes to earn dividends, you can continue rolling, to continue earning premium. All stocks eventually take a breather, and level off for a while. This gives you the opportunity for your 'in the money' strike price to catch up with the share price, so you can earn larger premiums by selling 'at the money' strike prices. Hope this was helpful.

Get well soon, More power, God Bless you.

Play to your strengths. Some people go 100% into real estate and are amazing at it. Some people have good discipline/risk tolerance and can weather the lows to reach crazy amounts in the trades market. Just be honest with yourself…

How so? I’ve indulged in trading for months now and it’s really quite complex and overwhelming, I’m currently in the red!

While I’m learning myself, I invest using aid from a pro trader Kevin S. Mikan’. His methods secures me ROIs in the markets.

Last week, I went ahead and used my entire Roth $20K to run the wheel on SOXL and TQQQ. Currently down around 30% overall but I've also made >$10k in premium and over $50k in forex. So as long as the market recovers even halfway, I'm good.

@@Couchlnvestor That’s interesting, I hear a lot about these professional traders. Anyway I could get more details? How do you get to him?

@miragarcia2428 go away

I would be VERY patient before implementing leaps right now. You definitely want to wait until the market has confidently switched trends, I would not buy LEAPs right now in hopes of timing the bottom. I would personally hang on to you premiums from the wheel and either 1) average down on existing positions, 2) Keep the money aside and bottom fish as the market falls further, or 3) wait until you're confident the market sentiment has shifted, inflation is under control, rate hikes have been slowed or halted, and the aftermath has played out, then buy LEAPs. My opinion anyway.

Not a bad idea, assuming you have the cash to buy 100 more shares, and assuming your thesis on the shares hasn’t changed. As long as you truly don’t mind the underlying you’re trading you can’t go wrong

Very fair point. So that said, do you prefer ATM puts?

@@InTheMoneyAdam I typically open for a .25 delta or slightly lower, but there have been times I sell ATM or ITM puts for a big discount on assignment.

Exactly, and I find this strategy doesn't work well in a bear market such as now.

@@stan7757 wheel works perfect in any market. It's harder to get the shares called away in a downtrending market so you can sell closer to or at the money for more premium. Just follow the golden rule of the wheel and only use stocks you believe in.

That's why it's better to only wheel stocks you want to own anyway AND that give out dividends so you can use them as dividend stocks