When you look at the breakdown in the numbers I can see that you're using a cash account. Do you personally use a margin and portfolio margin account for your trading? Reason I'm asking is because we you apply 2:1 RegT margin or even 6.7:1 portfolio margin (at TastyTrade) to the model the returns are eyepopping. Eyepopping number with a mostly conservative methodology is super attractive.
@dannshapiro120113 сағат бұрын
I'm curious about the possibility of a Wash Sale/Trade if price is above $35 at expiration. Do you accept the wash trade and continue with LTC and the additional paper work when doing taxes or move on to another equity still using this method of an ITM trade. I personally do not like messing with wash sales so I make the strike just above the purchase price. Your thoughts.
@wealthadventures2 сағат бұрын
I try to stay ahead on the option trades so I close and roll out well before the expiration date. It has been working but it can be a challenge with the low volume on LTC options. If I do get assigned, I take the loss which is not a wash sale. I would likely wait my time before purchasing new shares to avoid any wash sale.
@evraamgorgy160716 сағат бұрын
Great video, Dave. Are you considering another NVDA earnings trade this coming week (08/26)?
@wealthadventures2 сағат бұрын
I have several sold puts across earnings from 85-106. I may close a few prior to the earnings call. I have 1 long dated sold call at 128. I still have uncovered shares that I hope can grow like a weed.
@5584oleta18 сағат бұрын
Great video indeed
@wealthadventures2 сағат бұрын
Glad you enjoyed it!
@charlescostigliola547819 сағат бұрын
Hey Dave liked the recap video. Where can I download your covered call calculator? Thanks.
@wealthadventures2 сағат бұрын
Search "calculator" under my videos and you should find it.
@karinmottola922720 сағат бұрын
I do this same technique for ET, F, O, LTC, AGNC, and others. Sometimes a stock gets called just before the ex div date when it's too deep ITM. Is there a way to select an ITM strike price that's not too deep to get called before the ex div date?
@wealthadventures2 сағат бұрын
If it is too deep ITM this can be hard to do but just add time to the option if there is risk of assignment so that it is not attractive to the owner of the option. From the buyers perspective, they are looking at the value of the extrinsic portion of the option versus the dividend value. So if the stock is $2 in the money and the option is currently worth $2.40 with a $0.70 dividend due they have 2 options... Sell the option right now for $2.40 or take assignment and make $2.00 plus the $.70 dividend for $2.70. Just roll it out to a point where that $.40 of time value is in excess of $0.70. As you get deeper ITM, this may no longer work as it gets harder to add time value.
@wealthadventuresСағат бұрын
And one other thought. I like to do this with O and LTC but I don't do it with ET. One of the big benefits of ET and other MLPs is the tax treatment and ROC with their distributions. That will be re-captured when you sell in a taxable account. For that reason, I don't risk having shares called. Once I add shares, they are staying put!
@bravocortez408720 сағат бұрын
I do this on HRZN and SCM. Monthly with 10% annual dividends yield but I only sell CC after the ex dividend date.
@wealthadventuresСағат бұрын
Great to hear! Thanks and if you have any questions, just ask.
@whodidit9921 сағат бұрын
Why In the money as opposed to at the money?
@wealthadventuresСағат бұрын
Adds a bigger hedge. Trading off potential return for some additional protection.
@johnmaxwell135622 сағат бұрын
After watching your video I went back and looked at LTC's chart. You did make a little (your 5%). I'm curious what you did when the stock did drop to ~$30 per share. Did you add more? Thanks for all your information and insights.
@wealthadventuresСағат бұрын
I did in another account but these 300 shares I just continued to sell calls at 35.
@DimitriZen23 сағат бұрын
Hi, curious to why you chose the expiration 122 days out on the trade? What was that based on?
@wealthadventures21 сағат бұрын
I like longer dated expirations for these types of trades. Since they are ITM and distribute monthly, there is assignment risk. I add lots of time up front and roll a month or 2 prior to expiration.
@txbgould23 сағат бұрын
Thank you for this video. Interesting sweetener to a month dividend income strategy. What tool were you using to build that covered call calculation?
@wealthadventures21 сағат бұрын
That is a spreadsheet that I use. You can find a download in some of my videos. Just search for calculator.
@txbgould20 сағат бұрын
@@wealthadventures Thank you. I found that download. I appreciate your work!
@jmcole56Күн бұрын
Only missing was a pipe and a martini on the intro!
@wealthadventures21 сағат бұрын
Good idea! I'll work on that. Lol.
@maneugeniКүн бұрын
So what would you have made if the stock went to 38? I am just a little confused about how these ITM calls work. The examples you gave were if the price lowered to the call price and below. My understanding is you make the premium when you sell the covered call. So I assume you would make the full premium. What about the stock appreciation over 37?
@wealthadventures21 сағат бұрын
Since I sold a call at 35, that is the cap. If it goes to 38, 48, or 58, I would still have to sell at 35. That is the sacrifice of selling ITM. No upside but we have some security from the hedge if the stock/ETF declines. With some stocks and ETFs that pay larger distributions, their is little room for growth so I look to capture the distributions and some option premium.
@5584oletaКүн бұрын
How did this video drop supposedly five hours ago for a trade made very early in 2023?
@wealthadventures21 сағат бұрын
It is a re-post of an old video. After my last video, I got lots of questions about ITM calls so figured I would put this back at the top.
@5584oleta19 сағат бұрын
Thanks. I missed that by not paying attention at the beginning. Interesting trade. My question is where did you get that options calculator? Is it part of your trading platform? I’m on Seeking Alpha too but don’t see it there.
@wealthadventuresСағат бұрын
@@5584oleta It is in a few of my videos. It is a spreadsheet I made. You can download a copy from here in the description: kzfaq.info/get/bejne/l7mprM-Dt6rUfHk.html
@dlipp23Күн бұрын
Thanks for that, glad to see you were allowed out of your office :) in the beginning.
@wealthadventures22 сағат бұрын
Yup. Quick trip down to Florida.
@KevinCurryКүн бұрын
Thanks for this topic. I'm a holder of LTC and have written CCs but have found the spreads to be challenging for this underlying. Any tips on how you look for entries for this trade or similar situations? Btw, enjoy your videos!
@wealthadventures22 сағат бұрын
That is an obstacle. I tend to trade long dated expirations and roll out with 30-60 days prior to expiration. With little volume it can be a challenge. Keep checking and look to negotiate. It is one of the few times I will leave an option trade open for the day.
@TheKaelanКүн бұрын
What is this new background? I'm not good with change!!!
@wealthadventures21 сағат бұрын
Florida. Short vacation and now heading back to reality.
@raywagner8075Күн бұрын
Thanks for putting this together for us Dave!
@wealthadventures22 сағат бұрын
Thanks for watching!
@sactojlmКүн бұрын
It is "comprised", not "compromised", which gives it a totally different meaning. Ready to hire a sharp editor for a pittance? 😂
@wealthadventures21 сағат бұрын
I no read good...
@dberry2563 сағат бұрын
@@wealthadventureshaha
@sactojlmКүн бұрын
Pssst? Dave, you left the faucet on.
@wealthadventures22 сағат бұрын
I left the pool jets on.
@tommylong-p9dКүн бұрын
Hi,I own a few of these stocks. Do you think 20-30% of individual stocks is too much to have in your portfolio? According to many so called experts it should never be over 5% which i choose to ignore
@wealthadventuresСағат бұрын
In my opinion, It depends on who you are and what you know. I think for most investors, diversification is essential so simple index based ETFs are the way to go. If you want to put the time and effort in to picking stocks, go for it. However, I would not have any 1 stock be over 3-5% of my portfolio. I'm probably 30% individual stocks and 70% ETFs at this point. Individual stocks were a larger part of my portfolio when I was younger. I'm moving toward ETFs these days.
@theworkinginvestorКүн бұрын
Thank for for covering this! 🙏
@wealthadventuresСағат бұрын
My pleasure!
@troythomas14372 күн бұрын
I have an idea about using a variant of this inside a Health Savings Account. I am about to retire at 64 with 1 million dollars. The HSA has roughly $100,000. I will not be able to contribute anymore after 1 year. I will be using this fund to pay health bills. I am considering the following: 50% SCHD, 25% JEPQ, and 25% VYMI. SCHD AND JEPQ give protection in a draw down and VYMI gives diversification with international funds the overlap comparison looks really good and all three give good dividends to pay the health bills. What do you think. P.S. started my 20 year old daughter with exactly what you have except 50 xlk, 25 schd and 25 xlv.
@wealthadventuresСағат бұрын
Sounds pretty good. 3 solid funds that could play well together.
@garyschmelzer2 күн бұрын
I know this is entertainment purposes only and you’re not a financial advisor, but I’m 55 years old and plan to go to 865. What are some good recommendations for low cost index funds for someone my age of 55 comments are welcome.
@tprincipato2 күн бұрын
Always interesting to look at these reviews a year later. Fair coverage. I am glad i got in to this and is has its place in my top 3 holdings. Passed the recent VIX spike with ease!
@starr81113 күн бұрын
1:50
@geezusfreek13 күн бұрын
Hows it working now?
@wealthadventures3 күн бұрын
Rebounded quickly!
@andrewmyers35204 күн бұрын
Enjoyed the video as always. Can you make a video (or link me to one already made) on when you sell CC otm on an underlying that you want to keep LT and it goes on a hot run and now you’re going to get called away… would like to hear your breakdown on rolling, just buying back the cc at a loss and keeping shares, or even taking a chance on losing the shares, selling a put at the same strike or maybe lower, etc. I recently got called away on a CC stock I didn’t want to sell but I let it go. Turned around and sold a put at the same strike, hoping for a pullback to get assigned. So far it’s still far otm so I’ll probably just collect the premium. I’ll do it again but obviously the premium will shrink and eventually I’ll either have to up my strike or figure something else out.
@wealthadventures3 күн бұрын
Sure! I can tackle that. Here is an old one that might give some info: kzfaq.info/get/bejne/Y7yhaLZyuqjNhok.html Or at least illustrate it happens to us all!
@andrewmyers35202 күн бұрын
@@wealthadventures thanks! Watched it just now. Good insight! This options educational journey sure is interesting
@braddeicide4 күн бұрын
Oof, owning Intel stock...
@wealthadventures3 күн бұрын
Got rid of it a long time ago luckily but still took a loss.
@braddeicide4 күн бұрын
$140 for 100 shares of AAPL for a week, seems to pail in comparison to how much the value of the underlying will change in a week.
@JohnsFishTales4 күн бұрын
Glad to see your channel growing. It’s well deserved.
@wealthadventuresСағат бұрын
Thanks!
@jamiesmchen4 күн бұрын
Thank you for the easy to understand illustration and explanation. Have you explained about more complicated options trading pair like straddles, strangle and butterfly etc. I have not able to fully understand the use case of it and the steps needed to come out with such options pairs.
@wealthadventures3 күн бұрын
Hi. Here is one on strangles and straddles: kzfaq.info/get/bejne/reCGot1-nterZWg.html Hope it helps.
@jamiesmchen3 күн бұрын
Thank you again
@steventaylor42794 күн бұрын
I’m interested in learning more about how you set up your ITM covered calls on Realty Income. Do you have a video on that? 14:16
@wealthadventures3 күн бұрын
Here is a video on O but I didn't sell ITM: kzfaq.info/get/bejne/nbp3lZOHnKm4lXk.html Here is one on STAG that is slightly ITM: kzfaq.info/get/bejne/qZaGmMxkktLbqGg.html And here is one with LTC that is ITM: kzfaq.info/get/bejne/Y76FZZh10babcaM.html
@kurts67414 күн бұрын
If I'm going to sell options, I want to take some risk to make more money. Winning little trades is not worth it. I like to sell ITM calls expiring in 60 or more days on stocks that have had a recent big move up. My goal is to trade and hopefully buy the option back at a lower price sometime during the life of that option. I'm betting on the stock to be subject to some profit-taking. I also do the reverse. Selling OTM puts on stocks that have recently been beaten down. Believing there is a good chance the stock will go higher during the options time frame. The way the market is now both tactics have worked quite often. The more volatility the better.
@wealthadventures3 күн бұрын
Sounds good Kurt!
@David-lp1mj4 күн бұрын
Nice video. When do you do ITM covered calls vs cash secured puts? How do the premiums compare?
@wealthadventuresСағат бұрын
They are close but I always run my numbers. With money market accounts still paying a decent amount, moving into a stock to sell a ITM CC is a trade off. I did many more of these types of trades when cash was not paying but I could collect a nice dividend from a stock. When interest rates go up, calls become more expensive. Makes sense... spend a little to buy a call and keep your cash making money while you control 100 shares versus buying 100 shares. I could write about this for hours! Lol. I guess the math is the deciding factor along with my market view.
@PatrickHoodDaniel4 күн бұрын
Just found your channel and I love the way you explain options. I am considering selling a call ITM, so this video was very helpful in understanding the concept. Thanks.
@wealthadventuresСағат бұрын
Glad it was helpful! Any questions, just ask.
@Ed-bj5eq4 күн бұрын
Clear explanation, thanks. If you are willing to pay others to worry about options variables and like the OTM approach, would you say that buying ETFs such as DIVO, JEPI, JEPQ etc be more efficient in the long-term ? and, of course, if you are limited by money and can't access 100 shares of good stocks to trade then those ETFs are the best way to go ? I would guess penny stocks are not good for this strategy
@wealthadventuresСағат бұрын
I think ETFs like DIVO, JEPI, and JEPQ are a good way to access this market and hedge a little. If you can afford to simply be long stock, I would primarily buy VOO and other solid inexpensive ETFs. I would not trade options on something because it is inexpensive to buy 100 shares. Good luck!
@ericjohnson8294 күн бұрын
Be interesting see how you are playing Nvidia earnings this time, cash secured puts across earnings again or covered calls since it's already recovered alot in the past week or two ?
@wealthadventures3 күн бұрын
I have puts open from 106 to 85 and a call at 128 out toward the end of the year. Still have some shares that are uncovered as well. I'm expecting a good report again next week.
@johnmaxwell13564 күн бұрын
I like slightly OTM covered calls (usually about 5-10%). But it is still dependent on the underlying stock. I wouldn't sell many CC's on NVDIA simply because of the price volatility and the growth potential. I like slower moving, predictable stocks. And I like 1-2 weeks out...the price, usually, is more predictable and no one knows what the price of any stock will be at an extended date. Just my preferences.
@wealthadventures4 күн бұрын
That works!
@SaulTaboada4 күн бұрын
New to your channel but learned so much from your videos. Thank you sir!
@wealthadventures4 күн бұрын
Thanks!
@Editing.Ediction4 күн бұрын
Pay Attention !! Time to Upgrade The difference between professional KZfaqr and basic KZfaqr have a line of Thumbnail only !!! I'll do thumbnails but that's not really important but the important is it increases the CTR of your videos, I work with many youtubers and i know what a youtube channel needs.. So i offer you 50 thumbnail at the price $199. That you use multiple times on your KZfaq video .Probably this is one of the best investment i here from my clients !!
@marcalvarado19155 күн бұрын
I like playing with options but I don’t like all the variables you have to stay on top of to trade them on individual stocks. So I sell options on the triple leveraged indexes like UPRO, TNA and TQQQ. The regular indexes don’t have enough volatility to make the premiums interesting. I usually sell puts where I can make 1% and if they get assigned I turn around and sell calls at the money. I keep the cash to secure the puts in a money market paying 5% so I’m making money there plus the option premium. I should make 15-20% on my money this way but of course I would have made more just buying and holding the stock…
@wealthadventures4 күн бұрын
Interesting. I have not looked at using options with those products.
@ericjohnson8294 күн бұрын
@@wealthadventures Yes, with the semi's so hot many played calls on SOXL triple leveraged semiconductor etf. TNA leveraged etf since some thinking small caps are raring to have a moment in the sun with the rate cuts.
@jamiesmchen4 күн бұрын
The cash to secure the sold put option is in the same brokerage account that could not get 5% of interest. Can I ask you which brokerage company do you use?
@marcalvarado19153 күн бұрын
@@jamiesmchenI use Schwab and keep my cash in SWVXX. I believe Schwab requires it to be in SWVXX for 30 days before they will let you use it to secure your puts. I have heard that Fidelity and Interactive Brokers do not require that but I have not used them and don’t know for sure.
@marcalvarado19153 күн бұрын
@@ericjohnson829I’ve sold puts on SOXL too but I’ve grown most comfortable with the broader indexes. At least as comfortable as you can be with triple leveraged indexes anyway…
@whodidit995 күн бұрын
Please no cheesy stupid stock videos. It's all the rage on KZfaq. Horrible.
@ORACLEFASTMONEYTRADER5 күн бұрын
You look exactly like Doug DeMuro from KZfaq
@wealthadventures4 күн бұрын
I have never heard that one before.🤔
@ericjohnson8294 күн бұрын
Time for guy to schedule an eye exam and a little less screen time, not even close! 🙄😂
@ericjohnson8294 күн бұрын
🤣
@cristobalcardona41355 күн бұрын
In the last 30 days, QDTE has been aiming at 2.00 dollars in distributions during the month of August 2024.
@peterbell15805 күн бұрын
This is 0ne of the best explanation on a SPY strategy that I've seen! Your explanation makes it very easy for me to understand and I really like that you walk through your thought process of constructing the trade too. Thank you
@jessicaknoll47005 күн бұрын
This is very true !
@peterbell15805 күн бұрын
💯💯
@veliadisrosasjr16475 күн бұрын
He is the man!. His coaching is great.
@anthonypayne8106Күн бұрын
Always easy to comprehend
@whodidit995 күн бұрын
So many of these covered call funds being introduced. Do you think the value of the premiums will decrease over time as more are being sold to these ETFs? I'm a bit worried about this.
@wealthadventures5 күн бұрын
I'm not concerned about that myself. Premiums are driven by expected volatility.
@LV-ei1ce5 күн бұрын
Better to buy Cali muni bond for California residents. VTeB still will tax you for local taxes , only fed exempt