Avoid This Deadly Covered Call Mistake (Guaranteed Loss)

[@carlossoler-m4y]

I've been an investor in Apple,Tesla because I strongly believe in the company. I've always believed in the stock, but now I don't know if i am to re-distribute my portfolio and put some money in Nvidia. especially now that we are experiencing a market correction

[@daniel-w5g1u]

Both stocks have a long term potential, The most important thing is the ratio of the distribution based on the financials of each company. There are many other companies that are also doing well. You could just hire a financial advisor to guide you. A financial advisor really does help me do the distribution even between different asset classes. I don't even understand technical financial terms much. I just know I make really good profit, and I don't have to stress myself a lot.

[@carlossoler-m4y]

I have also considered using an FA but I don't know how to go about it. Please, what are the steps for getting one? Like a really good one.

[@daniel-w5g1u]

gabriel alberto william is the licensed advisor I use. Just research the name. You’d find necessary details to work with to set up an appointment.

[@carlossoler-m4y]

Thank you for the recommendation. I'll send him an email, and I hope I'm able to reach him and connect.

[@NoahNollens]

The thing to me is, if you invest and have other income outside of dividends then you will be able to live off dividends without selling. Which means you can pass that on to your kids which will give them a leg up in life. $52k dividends received in 2022.

[@SophieLoschy]

I agree! That's why it is advisable that you have to invest while you still have a regular job or earning a regular income, and do it constantly. You still need to have something that will keep you going even if you're investing. Good financial planning and money allocation is the key.

[@OyunBabus]

I’ve been down a ton, I’m only holding on so I can recoup, I really need help, who is this investment-adviser that guides you?

[@OyunBabus]

I find this informative, curiously explored this Julianne on the web, spotted her consulting page, and was able to schedule a call session with her, she shows quite a great deal of expertise from her resume.. very much appreciated

[@Silas.Fenton0]

I Hit 12k today trding. Started last month 2024. Financial education is indeed required for more than 70% of the society in the country as very few are literate on the subject. thanks to Louise O'Brien for helping me achieve this.

[@RyanMaverick8]

You trade with Louise O'Brien too? Wow that woman has been a blessing to me and my family.

[@AveryBrice8]

That woman has changed my life for good. I attended her investment class couple of weeks last year and she’s the best when it comes for Guidance.

[@Shelby.Thompson]

I'm new at this, please how can I reach her?

[@LauniiGavin]

I'm happy to see Louise O'Brien mentioned here, my husband recommended her to me when I was in Germany during Covid, she's amazing.

[@Joey.vasquez]

I was skeptical at first till I decided to try. It's huge returns is awesome. I can't say much

[@DAatDA]

Simple fix. Don't write ATM calls if you are trying to generate income. Keep them around 20 delta and you have alot lower chance of being excercised and having to buy back the stock. Also, rather than buying the stock back outright, you can sell puts at your original basis and wait for a pullback.

[@insurancecasino5790]

Spot on. Plus there is the option of going into another "good" stock or ETF that moves with or tracks the stock when things get too expensive.

[@shivamasija]

True

[@ninozehnder5136]

Agree, but I would sell the put just slightly below the strike price of the previous call (minus fees and a little margin) and not at the original basis. Provided of course, that your basis is lower than the strike price of the call (should be the case anyway...). Agree with that or do you see it different?

[@mo938]

Or don’t sell covered calls at a strike lower than your cost basis for the shares.

[@paulcoonce2493]

This is a perfect video! Thank you sir. Finally, I can see both sides of covered call option trading; that's exactly what I was looking for. I like to see win and loss situations explained (slowly). Most only tell you how to win.

[@simongross3122]

It's just arithmetic. If you find yourself holding a stock that's underwater, don't sell any call that would result in a loss. You might have to hold onto your stock for longer as you wait for the stock to recover. Or, if you don't have time, or if you think the stock will continue to tank, just accept the loss and put it down to experience. You can work this all out before you sell any calls.

[@motishorhaham9105]

First, instead of buying shares, I'd buy deep ITM (90delta) leap (long term) call (poor man synthetic stock). That way you use your capital more efficiently by using about half the capital you'd use for buying shares. Second, always update your basis cost for buying the options. Third, always sell your call above basis and leave room for the shares to grow. Afterall, you're bullish on the stock otherwise, don't do CC on this stock. Forth, If stock climbed above short call and you're still bullish, you can roll out in time and or up depending on the premium you collect and the potential of climb in the stock. Fifth, you can decide to sell less calls then the 90delta leaps you hold, that way even if stock climbs you'll gain more on the options you hold then the ones you're short on. Still better to sell above your basis cost.

[@marksoberay2318]

Agree an i always buy a few puts too w mu premium earned

[@GaliaBenartzi-e5w]

I lost over $80k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Margaret Bryant.

[@BruceKovner273]

I'm surprised that this name is being mentioned here, I stumbled upon one of her clients testimonies on CNBC news last week...

[@TabathaTovarw]

Really you people know her? I was even thinking that I'm the only one she has helped walk through the fears and falls of trading.

[@AnnaMacko764]

As a beginner what do I need to do? How can I invest, on which platform? If you know any please share.

[@Katebohner361]

The very first time we tried, we invested $1400 and after a week, we received $5230. That really helped us a lot to pay up our bills.

[@GaliaBenartzi-e5w]

SHE'S MOSTLY ON TELEGRAMS USING THE USERNAME

[@nondualist]

Very timely video for new CC writers - thank you!

[@skunkape5918]

Also, only buy the stock when it's at support. That will reduce the likelihood of a pullback after you buy.

[@scottamolinari]

So, the moral of the story is, don't do CCs at a price below the price you bought the stock for. I'd expand this to also be, if you do CCs below your basis price, give yourself room/ time to roll up and even out, so not losing the shares. Do a 30 delta or so.

[@insurancecasino5790]

I think a seasoned trader can pull those off all the time with sideways or consolidation price action. And sell both calls and puts.

[@scottamolinari]

@@insurancecasino5790 When you say "those", what do you mean?

[@MertDincMDMD]

@@insurancecasino5790, the only way to avoid getting stiffed is not to sell ITM calls. No matter how seasoned you are, you will get burned, or you can extend your time period to a later call option to meet your expectations in return.

[@Majki70]

yes, but what if underlying drops a lot? I still do CCs at around 15-20 Delta and keep an eye on underlying price and if option premium increases to around 50% I roll the option up and further away on calendar...

[@insurancecasino5790]

@@Majki70 Draw your lines, see what the stock is doing overall. Uptrend, down, or sideways? Even in an uptrend there are support and resistance areas. Once you got a feel for it, you can sell calls and putts inside that price action. Look at the spy now, it has not stayed out of the lines for days.

[@DonaldConrad]

I won't sell covered calls when the RSI is below 50 regardless of my purchase price because the premium is paltry compared to the RSI rising above 50, generally speaking. I won't sell covered calls below my purchase price unless the delta is below, say, a 5 delta (depends on where the stock is in sentiment, valuation-mine, and everyone else's, and I also consider the implied volatility of the individual stock). Finally, I take into consideration my actual cost basis along with the actual cost. If you sell a bunch of options on a position, and/or collect dividends, your cost basis is lower than your actual cost. I have a couple of positions in which my cost basis is a negative number due to option selling-in other words, those positions are essentially free. All that being said: I have lost the covered call game in the past which has strengthened the rules I trade by. The best anyone can do is observe and adjust... and be honest with yourself.

[@leecampbell5736]

Better yet, when those first calls get exercised and your shares get called away, sell puts at your original acquisition price till you get assigned shares.... wheel that bad boy...

[@straygypsy]

How do you feel about purchasing more shares with the premiums?

[@Nostalgicholy]

Here's another way to do this you wait for the stock to recover but in the meantime what you can do is check the straddle prices the straddle prices tell you how much the stock will move. So now if the straddle price is 11$ that the price of the stock may go up and down $11 therefore you can go to the father edges of that $11 and sell the call

[@damaddog8065]

If you are trying to do what S.M.B. capital is showing DO NOT BUY THE SHARES OUT RIGHT RUN THE WHEEL, SELL PUTS JUST OUT OF THE MONEY MAYBE A WEEK OUT. The strike price of the put you sold if you get assigned is the minimum price you can sell the short call against your new shares. This is safe even if the stock drops you do not incur loss unless you cash out, you might get your collateral locked up. You must not sell calls below the price you paid for the stock.

[@Majki70]

the video is about CC mistakes, not about wheel strategy, keep that in mind.

[@bluehorseshoe9216]

Great video as always. Thanks

[@stevemccullough7075]

Great video Seth. Thank you for sharing!

[@leanvigo]

Very nice job covering the basics. I am sharing this not to brag but to show what’s possible. I’m retired and I have 2 separate portfolios. One is a long term growth dividend portfolio of stocks where i sell covered calls strategically and my 2nd portfolio is the Crypto trading strategy where its all about income. This year I am on pace to make $120K in realized options profits and around $730K in crypto profit... What is great is that my long-term portfolio is still up significantly as well. As such, it’s possible to generate excellent income but still have a total return perspective. ...Amidst this, the insights of a knowledgeable guide like that of Sandy Barclays can be crucial. Her expertise in navigating the nuances of trading has been the key for Me understanding and making the most of these emerging financial trends.

[@leanvigo]

Sandy Barclays program is widely available online.

[@jchall12]

If the market has taught me anything, it's that it always recovers, but I can't seem to focus on the long run, when major factors like my retirement and my reserve are wreaking havoc on inflation. I require a solid data trajectory and solution as soon as possible.

[@SharaizIqbal]

Over the years, I've been a part of numerous trading programs, sifting through a barrage of information. Yet, nothing has come close to the sheer clarity, depth, and precision of Sandy insights. It's akin to finding a diamond in a coal mine.

[@sophiepascoe]

I appreciate the professionalism and dedication of the team behind Sandy’s trade signal service.

[@MozzNik]

Most people are retiring this year and has nothing to show for. But I assure you it’s never late to get your financial life together again.

[@pamnathanson1519]

No video link provided for understanding option basics in the middle of this video saying that a link is appearing.

[@ChengZhao-yw8zl]

So if the stock keeps tanking and you hold the stock, you just have increasingly large unrealized loss. That slight rebound might be your last chance to get out. And SMB Capital is a top prop trading firm in NY?? How about try Jane Street?

[@CptCarbon]

what about rolling a deep in the money covered call?

[@davidgallimore9656]

Do you have any videos about selling for a credit Butterflies that are long dated (maybe 21+DTE) with the long strikes at the money with narrow short wings (wings no more than 15% to 30% of the expected moved)

[@jv-king]

Why not cover the strategy of rolling up the covered call?

[@benruggiano6306]

What happens if the Stock proceeds to go down??? Limited upside and downside can be great.

[@DAatDA]

Don't buy shitty stocks that continually go down. There are plenty out there that dont

[@Nostalgicholy]

Don't allow the call to be exercised do a calendar roll down all the way until you hit support that's when the stock has reached its lowest and then can be exercised

[@benruggiano6306]

@@DAatDA Really, Lucent, Worldcom, CSCO, MSFT etc etc.

[@Majki70]

I still do CCs at around 15-20 Delta and keep an eye on underlying price and if option premium increases to around 50% I roll the option up and further away on calendar...

[@VictoriaBennett105]

I will be forever grateful to you, you changed my entire life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Nicole Miller.

[@SheddyMathew]

Wow. I'm a bit perplexed seeing her been mentioned here also Didn’t know she has been good to so many people too this is wonderful, I'm in my fifth trade with her and it has been super.

[@zoellaHernandez]

She is my family's personal Broker and also a personal Broker to many families in the United states, she is a licensed broker and a FINRA AGENT in the United States.

[@JacksonSilva170]

You trade with Nicole Miller too? Wow that woman has been a blessing to me and my family.

[@EltonJohn-eb7ef]

I'm new at this, please how can I reach her?

[@JulieBrooks-xw4nd]

I was skeptical at first till I decided to try. Its huge returns is awesome. I can't say much

[@petediaz9310]

Excellent point!

[@jakmak514]

Thanks Seth!

[@kuldeepsingh_350]

If you sense price going can't we buy back shorted call and sell higher call??

[@Josecannoli1209]

Yes for the current market price… but because of IV spikes and theta (if you push the expire date out) it may not make sense to do

[@stevenhochman1]

Why sell NVDA 124 calls and not sell 130’s to expire next month?

[@kchaney9735]

greed, mixed with stupidity

[@notseekingconverts]

Think about starting with collars to leg into a position.

[@DERICKGRAY]

After a headline-making stock market crash last week, if you didn't panic and simply did nothing then you'd be up more than 5% this week. If you are an Nvidia shareholder, you'd be up 11%. That is how the stock market works.

[@ryldauril2228]

thank you

[@louismatherne6808]

I don't get it. When my CC strike price is breached, I just roll up and out if I want to stay in the position. In most cases, the price will pull back and I'll be whole.

[@ddroz23]

if you capping a high momentum stock by covering it you loose the point. it might as well me a grocery store. You have to take advantage of the IV.

[@NimishP]

There are certain covered call ETFs in Canada that does exactly the same thing what this video is asking not to do. That’s why I am not a fan of covered call ETFs - albeit I do sell covered call options on securities I hold in my retirement account.

[@jPrada]

But still you need to deal with the paper loss when NVDA is going down. Compared to premiums the pain is big.

[@kawaiimdsweey9348]

Why are you not talking about the ability to roll the trade out to a further expiration date and up to a higher strike price!

[@Majki70]

you have to keep an eye on underlying price and roll the options.

[@blaqpaks1808]

You really don't take a loss unless you sell below your cost basis, not your original purchase price.

[@aprilvancleve9463]

This was me on SBUX when the Chipotle CEO took over. 😮‍💨

[@gameplayparadiseofficial]

Happened to me this week with AAPL. I sold a few puts on it and collected some premiums for a couple of weeks until I was happy to have it assigned. Then this week, I stupidly sold a covered call under my average price by $5 and AAPL rally hard Thu and Fri. I had a few choices. I could roll out a few weeks and pick a price that’s close to my average or slightly out but I’ll get hit a bit. Or… just let the option expire and just let it taken away and then sell another put later which is what I did. I’m selling put this week depending on the chart. But essentially, I went from making big gains to losing all my previous gains. Pretty crazy.

[@nfny-ze8xc]

Can’t you just roll it up and out so you’re not forced to sell.

[@jamesa5720]

I disagree with you a bit this time. If I have a long position at $129, and the stock is down to $113, I am still going to stick to my strategy of selling covered calls at a exercise price and duration consistent with my normal target delta. I am not going to be governed by my basis in the stock, I am governed by the probability of how much the stock will move. This example is even better illustrated let's say if my basis was $179. Would I only write a three week $180? Nope.

[@loupasternak]

selling those 130's for 43 cents is ridiculous. CC selling is the same as put selling , something rarely mentioned.

[@alexpoon9048]

You can always roll up your call

[@MertDincMDMD]

Not if you are deep ITM! you are stiffed take your loss and move on, rolling out rarely works

[@Majki70]

@@MertDincMDMD not true, last year i was doing CC on TQQQ and I was all the time in negative territory....I still came back positive even when i had to buy several time expensive calls back and roll them up and further away on calendar.

[@p38cobra]

O link

[@johnt697]

NEVER..NEVER...NEVER write covered calls on NVDA ...My cost basis on NVDA is significantly lower than current price... but I am still not selling CC. Because NVDA can have incredible runs and I am not going to lose my shares. Pick another stock that moves sideways.

[@Nostalgicholy]

Once it hits your basis then start a rolling strategy

[@johnt697]

@@Nostalgicholy This is a great way to get into more trouble..

[@Nostalgicholy]

@@johnt697 Eh ? No the strategy roller allows you to automatically roll 10 points away only on upside. If it's below your basis the strategy won't execute. I've been using it since NVDA was in the 100s.

[@mikebuchanan7610]

Depending on your position size, you could trade around a core position with a few contracts, and if they get assigned, sell puts. You'd still have a core position untouched. Look at where resistance is, and use multiple strikes rather than everything in one spot.

[@jimmy_tree]

IWM baby!!!!!

[@poppiescarter9720]

Lopez Helen Brown Sandra White Sarah

[@thetradersam6157]

is written in the bible to never sell covered calls below your purchase price..

[@MertDincMDMD]

not if you like adrenalin :)) ITM all the way!

[@aprilvancleve9463]

😂

[@Majki70]

One of my best working strategies is Deep In the Money covered calls (80-90 Delta)...you just need to find underlying that has high IV options and that has weeklies and no upcoming earnings season. I manage to make 0.8-1.5% profit weekly on these.

[@skunkape5918]

☦🕊💪

[@medavide1449]

Remember, you have to pay taxes on that gain.

[@alanh.otterii4872]

Is that a problem. I see it as a good problem.

[@KG-wh8yv]

@@alanh.otterii4872 Right, I will GLADLY pay taxes on more and more income.

[@dg271]

@@alanh.otterii4872 it's funny how people have been conditioned to not only accept government theft through taxes, but to see it as good.

[@hectorurdaneta4518]

Not if trading within an IRA

[@kentma7516]

I can hear you blow. that was funny