How To Manage Assignment On TERRIBLE Wheel Strategy Trades 🔥 | LIVE OPTIONS TRADING

[@scottreesetradinginvesting7936]

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[@danielharry6817]

Scott, good video but what can I do if I expect the stick to keep going down. The call never gets challenged but I'm still losing money on my shares. Thx!

[@jeremiahmiller4640]

Great video Scott. When using the wheel I tend to pick extremely conservative strikes so just in case I have to roll most likely I can roll for a credit. I was a moron and sold robinhood $20 puts during the market run up. I took assignment and have been selling calls lower than my strike reducing my basis by a decent amount. Although I’m always scared there going to be acquired and gap up 25 percent one day.

[@scottreesetradinginvesting7936]

Hey Jeremiah…yup totally understand your concern with that Robinhood trade. But now you know that you can hopefully roll those calls repeatedly if the stock does recover back above your call strike!

[@jeremiahmiller4640]

Scott where you from?

[@dawson0610]

I dont think Alcoa is known for their high premium options. How long of contracts are you selling?

[@TBradFashionModel]

Smelters in Europe are closing due to Energy shock, autos slowing,,.......AA at resistance....

[@fast4oward922]

if you buy a 1 put on a stock at 100 and the stock falls to 85 what happens to the put as it gets closer to expiration let say only few days left... does it increase or decrease in value? thank u

[@scottreesetradinginvesting7936]

It depends on the price of the put, the strike price, and the stock price at the time you purchased it. Just because a stock drops in value does not necessarily mean the put price will increase by expiration. As time passes, the option will slowly lose all of its extrinsic value...which can be offset by a significant drop in the stock price. However, if the stock does not drop far enough, then the put price by expiration may still be less than the price you paid to buy it.

[@cknight3457]

A third possibility: If you believe AA and FCX are going up at some point, you could sell cash-secured puts at a much lower strike. If assigned, then you considerably slashed your cost basis. You would no longer be bag holding and could sell two covered calls simultaneously on the same stock. I've heard of this dramatic cost-basis lowering technique referred to as "flying a rescue mission". Your FCX experiment is probably going to be the winner. If your odds are 70% chance of success every time, you will lower your basis faster than AA. Just a guess.

[@scottreesetradinginvesting7936]

Yes, technically the third option would be to sell more puts, but this will add more risk to an already losing position. Just because I think the stock will recover does not guarantee that it will. So if I double down with more short puts, and then if the stock continues going lower, I will just be adding more fuel to the fire. So bottom line at least for me is that I will never try to adjust/defend a trade by increasing risk.

[@neuvocastezero1838]

You submitted a $0.10 sell order, but got filled at $0.13? How does that work?

[@investavagary7591]

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