Never Work Again using this Simple Covered Call Strategy!

In this video I am breaking down for you a simple and straightforward Covered Call Strategy that uses either SPY or QQQ as the underlying investment and will easily result in FOREVER Cash Flow for the Average Joe Investor. Covered Calls are an excellent way to generate cash flow.
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This communication/content is for informational purposes only and is not intended as personalized investment advice, tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. This communication should not be relied upon for purposes of transacting in securities or other investment vehicles.
#coveredcall #dividendstocks

[@AverageJoeInvestor]

Make sure to leave your $0.02 in the comments! ALSO, WATCH OUT FOR SPAMMY COMMENTS! =)

[@candlesbypurplerose1010]

Can covered calls be done on any stock? On any eft? If we want to be conservative and not risk having to sell our shares- using a delta of 15? Or 10? Is that the safer method?

[@candlesbypurplerose1010]

Can covered calls be done on AAPL? On ABBV? BM? MO? SCHD? SU? XOM? If we hold 100 shares of each? Or should one sell those and purchase VOO or QQQ to implement this covered call strategy described in this video? Thank you

[@candlesbypurplerose1010]

Is there a time when NOT rolling over the covered call is indicated? When is not using covered calls? What indicators would we look for?

[@candlesbypurplerose1010]

Do JEPI or JEPQ do this? Is it then easier and safer to have that lump sum in those? Maybe do a video comparing these etfs vs this strategy . Thank you

[@janshuster1426]

​@@candlesbypurplerose1010 On anything that has options. Just make sure you want to own it. Sell puts if called away.

[@Brandon96712]

I’ve had majority of my holdings in tech stocks and irrespective of market changes, I’ve done pretty well especially with apple’s P/E(price to earnings ratio) gaining over 30% this past decade, now my questions is what stocks do you think will be the next apple in terms of growth for the next decade.

[@AustinButler-kd4ny]

It might be difficult finding the next apple within the tech stock sector, apple has performed way better than the others, maybe look outside of tech stocks.

[@SteveKalfman-yv7co]

I've remained in touch with a financial analyst since the start of my business. Amid today's dynamic market, the key difficulty is pinpointing the right time to buy or sell when dealing with trending stocks - a seemingly simple task but challenging in reality. My portfolio has grown by more than $600k within just a year, and I've entrusted my advisor with the task of determining entry and exit points.

[@Brandon96712]

Could you guide me on how to get in touch with your advisor? My funds are being eroded by inflation, and I'm seeking a more lucrative investment strategy to effectively utilize them.

[@Brandon96712]

That's impressive!, I could really use the expertise of this advisors , my portfolio has been down bad....who’s the person guiding you.

[@SteveKalfman-yv7co]

Finding financial advisors like Natalie Noel Burns who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.

[@marshallwhite7570]

Hey Joe, here's an idea for a video. It's a strategy that I've come up with that I haven't seen anyone else talk about. I believe it fixes alot of the issues of living off JUST covered call etfs. Say a person invests in traditional etfs until they reach a $1million portfolio. They then take 75% and invest it in covered call etfs (JEPI, SPYI, JEPQ, XYLD, etc.). The other 25% they invest in a dividend growth etf, ideally SCHD. They NEVER spend the dividends from SCHD, they reinvest it all into the covered call etfs. They only live off of the covered call etfs. This simple strategy should create a huge dividend snowball. This would cause the entire portfolio to grow and the year to year distributions to grow immensely. I think it's worth a video. Love your channel Joe!!! Keep up the great content!

[@jackengholm4505]

So what happens when you’re assigned? Do you immediately write a cash secured out at same strike price? Do you buy back the shares at market value? Do you avoid assignment by buying to close the contract? Also, I wonder if this would be a losing strategy in a brokerage account with all taxes accounted for. Do you mind touching on any of these above points?

[@MXb7R]

Did you figured it out?

[@giffy7962]

I'm more of buy and hold SCHD kind of guy but the options volume and open interest is really terrible. So I basically run the wheel/covered strangle on COIN because the IV has been pretty high. At the current price it doesn't take up a lot of my capital and the premiums are pretty good so I like the fact I'm using just a fraction of my overall capital. I then use the premiums to buy more SCHD. I own crypto and believe in it long term so I don't mind having a couple hundred shares of COIN sitting in my account if I had to hold for awhile.

[@fabiGBOtown]

At what delta?

[@giffy7962]

20 - 30 delta is what I like to do @@fabiGBOtown

[@AnyangU]

This is very enticing! Don't get me wrong. It is all interesting. But, to what extent does doing options with QQQ lead to big jumps in price which lead to having to sell and then having to come- up with extra money to re-buy the shares? To what extent do you think that you have to trade some less volatility so that you don't lose your shares? As always, I really enjoy and learn a lot from your videos, thanks!

[@jamessullivan8300]

with a .15 delta its very unlikely shares would be called away. Even if something would happen to cause a spike up and the options go i"n the money" all you have to do is roll them an extra month out and maybe up in strike price too. Or, simply close out the call option and realize a loss when closing it out. With a .15 delta you will have more winners than losers.

[@fabiGBOtown]

Could you talk about strategy? Example, when to write the weekly option and more of the kind?

[@ManeosCompoundingMachine]

Quick question - In this scenario, when you are getting the shares called away, are you then selling cash-secured-puts or are you immediately buying new shares and then selling the covered calls? So, is it a ‘wheel strategy’ or pure covered calls?

[@olfoogy]

How about rolling out the option and not losing your shares..... If you really want to hold them all you have to do is roll the option out..... If you have a high-priced stock you can still make a profit I'm rolling the option out and I do it weekly

[@brettpayton6286]

The one thing Jim Cramer says for new investors due is invest there first 10k into a cheap index fund. Well of sorts if you went this route even staring with just 10k its eye opening what selling covered calles to them will due. Very awsome video

[@rickshipley7232]

So what happens if your' are assigned? do you sell an at the money put or do you sell a put at the strike you were assigned or do you just buy the shares back?

[@ManeosCompoundingMachine]

This is my question as well.

[@JohnnyCastaneda-kh5oo]

My guess is to keep the party going with collecting a cash flow, you sell out of the money puts until the prices comes back down and you get assigned the stock at the lower price. Then you go back to covered calls, rinse and repeat.

[@timaguilar5893]

Thanks for the video. I personally don't like the weekly example because these projections don't account for trading fees. Especially when it's now a lower delta so a lower premium, the fees is a much higher percentage of the trade.

[@doleo_metal]

It's 65 cents to sell a covered call at Fidelity. I think we'll be ok.

[@josephmonaco1721]

Many good comments. Your actual results with this strategy will be drastically different than the poster's assumptions. Another thing to consider is depending on when you sell your calls, you could be also giving up your dividend if the stock gets called away.

[@blockaderunner]

If you did it on a monthly basis and timed it post-dividend Date, what day would you set the expiration for relative to the ex-dividend date? the next day? same day?

[@Bajoli86]

Question: how often where you FORCED to sell your 100 stocks at a certain price? What did that mean for your profits? You can also sell puts, if you want to buy the 100 stocks anyway, and then when you have the 100 stocks, you start selling a call. Other suggestion: look at implied vollatility, to determine which options are the most expensive relatively.

[@KelvinOlivo47]

This was my curiosity also, I dont think the example given in the video accounts for downturns, and the stock price being below purchase price, which will impact the amount of premium collected each week, in the example period, there have been drastic downturns and if you're holding qqq purchased at a much higher price, your premium will be basically nothing for months waiting for the price to rebound, i.e. if you bought QQQ on on 01/03/2022 @ $399 and did a CC for that week's Expiration the option would have expired worthless as QQQ closed the week at $379, the market took a beating and did not recover the back to the purchase price until the end of NOVEMBER 2023, that is nearly 2 years underwater, in which if you are doing CC then you're risking selling the underlying for less than the purchase price, personally I do covered calls as my only income but the video paints a best case scenario every week in and out, the video is good but is not realistic.

[@psiga]

That is _SO_ inspiring and tempting. But also I wonder whether there's any way to properly backtest these results and get a sense of how often the strike price is met and we take a hit. Your spreadsheet is a little bit too much of a wing in a wind tunnel, rather than an actual actuary's grim statistics. (I'm pretty sure it's still a net profit, don't get me wrong!)

[@ericvinson4628]

It’s not only not profitable, its negative vs. buy and hold. Imagine a transaction in which you take a one percent chance of losing $1000. A rational actor wouldn’t take this risk for less than $10 (1/100 of $1000). The option premium is typically far, far less than the $10, maybe $2 or $3 and you can see why, over time, the strategy is a loser. Joe does his audience a *severe* disservice with these ridiculous illustrations that never account for the palpable and inevitable risk that your shares are called away because the stock’s price jumped past the strike price. Also, remember what selling a covered call really is: it’s a bet against the position you bought presumably because you believed it was a good investment. /rant over

[@vinnythejinny]

The flaw with this strategy is that you never considered that your shares are called away due to assignment. In 10 years, its impossible to never get called away. You are also assuming that you are selling covered calls on your shares so once they get called away you are back to square

[@KrahsThe]

agreed. I made the same comment on some previous video. This is alike false advertising, this is not how it works in reality at all.

[@ronaldwilliams1890]

Plus my broker, schwab, charges a fee on options. 65 cents per contract.

[@vinnythejinny]

@@ronaldwilliams1890 same here on IBKR

[@candlesbypurplerose1010]

Do Fidelity charge fees on covered calls?

[@itsjustme114]

What if you just buy them back after assignment?

[@alonsaggie]

Could you relate why choosing a conservative 20 delta? Why do you care about option assignment? You could always sell puts to but back the stocks and start over. Why not a higher delta around 30? Thanks for all the great content!

[@effigy98]

Do you think JEPQ replicates this strategy or is there an alternative to set and forget?

[@shill1103]

Isn’t this basically what JEPI does ? Why aren’t they getting these crazy returns ?

[@markkeller9378]

I believe JEPI sells at the money calls, not +15, so they get called a lot. Plus these are weekly calls.

[@antoniorao5345]

I need a video about when to close. When to execute and when to roll forward.

[@candlesbypurplerose1010]

Yes me too! Actually a live workshop where you walk us through placing cc to closing or rolling over- please consider that.

[@johncostouros22]

Why wasn’t rolling your position or getting assigned taken into account when calculating returns?

[@justsnappy]

Because he calculated based on a very low (conservative) Delta.

[@jdjeep46]

@@justsnappy.15 delta means 15% of the time you either roll, buy back, or get assigned.

[@justsnappy]

@@jdjeep46 yeah 85% chance of not hitting that strike

[@RobC1999]

@@justsnappy that means about 7 or 8 times a year it’ll expire in the money ( out of 52 weeks). There needs to be a strategy for when this happens because it will…

[@ericvinson4628]

Joe is pushing a false narrative that you can take an infinite number of 85% chances and never have your shares called away. It’s total BS and I think Joe knows better but needs the views on his videos so he claims there’s free money in covered calls. There isn’t - as another poster points out, you’re going to get your shares called away 7-8 times/year on a covered call strategy based on an 85% risk profile. The real problem comes in when you calculate what your loss can look like when this happens: technically the downside risk is infinite but truly imagine that a $30 stock goes to $40 after you sold 100 covered calls for $20 at a strike price of $35. You got $20 in premiums but lost $500 in equity (($40-$35)*$100 shares). So you lost 50x your investment chasing a $20 return. You might as well buy a lottery ticket because the reality is that this strategy is a loser long term unless you’re a very sophisticated investor and know how to manage/mitigate this risk. Joe even did a video earlier in 2023 showing how his own covered call strategy in SBUX blew up in his face! Don’t do this, please don’t do this, folks.

[@FigureFourNews]

Huge difference between investing QQQ in 2003 versus 2023. How does it look today to start at 0 and contribute monthly into QQQ? How long would it take today to get 100 shares?? Quite a looooonnng time.

[@disco4535]

Were any of the covered call options executed, and forced to sell the shares?

[@torchy187]

This has to be backtested with shares called away.

[@ericvinson4628]

Great question, and the answer is “no.” Joe is pushing a false narrative that you can take an infinite number of 85% chances and never have your shares called away. It’s total BS and I think Joe knows better but needs the views on his videos so he claims there’s free money in covered calls. There isn’t - you’re going to get your shares called away 7-8 times/year on a covered call strategy based on an 85% risk profile. The real problem comes in when you calculate what your loss can look like when this happens: technically the downside risk is infinite but imagine that a $30 stock goes to $40 after you sold 100 covered calls for $20 at a strike price of $35. You got $20 in premiums but lost $500 in equity (($40-$35)*$100 shares). So you lost 50x your investment chasing a $20 return. You might as well buy a lottery ticket because the reality is that this strategy is a loser long term unless you’re a very sophisticated investor and know how to manage/mitigate this risk. Joe even did a video earlier in 2023 showing how his own covered call strategy in SBUX blew up in his face! Don’t do this, please don’t do this, folks.

[@mrwak6]

What is the plan if the underling drops and you can't sell calls for any meaningful premium? Are you taking this into account? Sorry if i missed it.

[@dakkon74]

Yeah, this may be oversimplified, and leaving out details. Like how are calls that go ITM being handled?

[@Robbusolo]

@@dakkon74 you can roll it to keep your shares if it goes in the money. If the underlying drops, you could continue to sell covered calls at the .15 delta or more conservative to be sure you don’t get assigned for a loss. It would take more management, but doable.

[@dakkon74]

I know what the options are, but I am curious what he used in his simulation.@@Robbusolo

[@unclemiketrader]

What would the spy and qqq have done if one started Jan 1, 2022. thanks

[@alexandresimioni798]

Hi Joe, great video as usual. Could you kindly do a similar video but with TQQQ due to the fact that it will require much less initial capital to start this journey? Thank you in advance

[@leny7829]

You do know the TQQQ is a leveraged product on the QQQ right? I think you mean the QQQM which is essentially the same as the QQQ but the price is less than half? Although, it would be interesting for Joe to do a video on sales of covered call of leveraged products!

[@travismartinson1813]

SOXL has better premiums. I sell my calls ITM when the shares are up to protect some of the downside risk of owning leveraged shares. When they drop I sell OTM. When Im getting too deep ITM I roll out and up to a higher strike to keep my shares.

[@philelmo]

Again not factoring in shares getting called away and you need to buy back in. Please explain this part

[@marinrodriguez7729]

Rather than jump in and buy the underlying SPY or QQQ, one can always sell aggressive CSP's to generate premium income as a ramp up to being assigned. The assumption here is that you dont mind owning the underlying...which or both very solid funds. Once you get assigned then off u go selling covered calls for more premium. As long as you maintain that buffer of a low delta, you will be able to benefit from both price appreciation and premium income. Add in a bit of risk management so that in a market downturn u arent caught out, then u should b able to grow your portfolio substantially. Bonus is this is in a tax sheltered acct!

[@BTBLive]

Would love to see a build account with puts and calls. Say starting with 1k,5k10k 25k 50k over time to build. My plan was Pfizer to AMD to Amzn to iwm,qqq then spy.

[@robbybee70]

what if we want to increase chances of assignment

[@aldoh9035]

I like the strategy very much. How can I have access to that spreadsheet? Also I’d like to know if I can start that strategy now for five years that’s when my retirement ages is it gonna be profitable thank you.

[@-mr3puttz-310]

What options are sold if the stock drops a bunch or for an extended time?

[@markkeller9378]

I believe you keep selling calls each week, at +15 delta to in the money……

[@hifox3261]

What if the holding is assigned?

[@torchy187]

QQQ was at 264 on January 2, 2023. 15 delta would have got run over (easily called away) in January leaving you chasing returns in all of 2023.

[@mjs28s]

Um....you do actually understand that you don't win 100% of the time, the delta gives you those odds. Also, you don't have to just blindly sit on your hands and do nothing. You can take corrective trades (rolling out / out and up). But yes, sometimes will will have shares run on you but that is also the reason for weeklies. Shares won't run that far before you hit your contract expiration. We are talking about a major market index here and not an individual stock that might have good news and jump 20% in a day. Lastly, if you are reinvesting dividends and premium along the way and if you don't want your shares called away and if we pretend that the options seller doesn't know about rolling out or out and up, you could harvest a few shares to cover the cost of closing your contracts. All of that word salad out, QQQ by the first Friday after your 264 Jan 2 price was only at 268.8 (market wasn't actually open Jan 2. A 15% delta was probably $5.50 at the time so not likely you would have had your shares pulled away. But you only spoke to one trade. What makes you think you'd be chasing it in all of 2023? Guessing? I have sold CC for years and have followed prices on equities up, down, back up again. You can easily make course corrections, and yes. Sometimes you lose but you won't spend a year chasing losses. You'd be amazed at how quickly your premiums add up and even with giving them up now and then to reverse a trade you can still be very far ahead of just buy and hold.

[@bbarre4601]

Does this video assume shares don't get called away over 10 to 20 years? Why assume that?

[@ericvinson4628]

As much as Joe provides excellent content, his assumptions on this series of videos about doing your own covered call strategies is deeply, deeply flawed because yes, your shares would be long gone and you'd lose huge chunks of the gains you would've received. No one should do this strategy imho because every time your shares are called away you lose so, so much more than you ever received in option premium.@@bbarre4601

[@cryptofists2412]

Well then you just sell Cash Secured Puts premium train continues.

[@torchy187]

Again, chasing returns from your CSP you sold when QQQ hit 390 but then went all the way back down to 350…​@@cryptofists2412

[@scottish58]

I’m surprised I haven’t seen this question in the comments yet, but what about taxes. If you are not using a retirement account to do this, premiums get taxed as income I believe. Is it still profitable when you’re taking a 25% hit on your profits?

[@tonny9168]

Taxes are a portion of your profit. You will remind with 75% if you pay 25% in taxes.

[@Celticmedicineman]

I'm sure it would be a ton of work, but would be interesting to see if every year taxes were accounted for. Great video, love the content.

[@skittles2055]

@@tomthurlow5497this particular example is Not in a Roth IRA (one or more of his couple most recent videos Did portray it in a Roth IRA, as if you were maxing out contribution limits each year). This video example is as if you started out with $100,000 (which couldn’t be done in a Roth IRA due to $6500 or so yearly max contribution limits in a Roth). Now maybe this video Could be relative within a Roth IF we presume the Roth Started with $100,000?

[@JessicaAnderson.]

As an lnvesting enthusiast, I often wonder how top level investors are able to become millionaires off investing. . I’ve been sitting on over $545K equity from a home sale and I’m not sure where to go from here, is it a good time to buy into stocks or do I wait for another opportunity?

[@michaelkalish8725]

how is this different from Jepi or Spyi?

[@djayjp]

What about all those statistics that say if you miss only the best like 5 days, then your returns will be like half of the historical average (as one would with selling CCs)...?

[@dannytetreault]

$0.02 thanks. Very powerful strategy!

[@unclemiketrader]

And did you always sell the 15 delta no matter if you took a big loss and the if called away it would be below your cost basis? Did you just let them expire and rebuy????

[@federicorosso823]

Interesting video. How do you manage CCs? What duration do you sell and how do you manage them? Leave to expiration, roll at 21DTE?

[@PW060284]

what's a reasonable expectation on the return on capital (the price of the 100 shares) of writing .15 delta covered calls weekly

[@probst9999999999]

What is your assumed option return and how did you find/decide on it? I was looking at something similar with TQQQ and 25-30% OTM monthly options (which are as likely to get called as only 10% OTM on QQQ) and this seems to be almost on par with what I was seeing with TQQQ which seems too high to me. How are you accounting for getting assigned?

[@ericvinson4628]

He isn’t

[@probst9999999999]

@@ericvinson4628 Lmao then this is useless and completely wrong, he'll get called eventually.

[@tewanwilson]

I appreciate you letting the numbers marinate lol very inspirational

[@tomthurlow5497]

I know that you have the actual historical share prices, but you are estimating historical option prices. How is it that you think the estimated option prices you use are realistic?

[@NavShay]

Very nice video, is the model assuming that we never got assigned or 15 delta historically never resulted in assignment?

[@nickingrao5869]

What do you think about doing this with a leveraged ETF, say TQQQ?

[@stan7757]

Do either of these pay dividends?

[@AverageJoeInvestor]

They do BUT the dividends are not large, especially with QQQ. THANK YOU for watching and for leaving your $0.02 in the comments! 👍😎

[@djayjp]

Does this take into account that USD is worth half of what it was back in 2003 (in terms of option premium)...?

[@Megrogs2641]

Could you add VTI as well? I’d like to compare that to QQQ and SPY as well. Thank you for the awesome videos!

[@AverageJoeInvestor]

THANK YOU for that feedback. I will take that away. =) THANK YOU for watching and for leaving your $0.02 in the comments. =)

[@CarlDi3trich]

If we get assigned in a Roth with this strategy ( lump sum ) what exactly happens? We can't withdraw until...59 1/2 years old, right? Also...isn't there a limit to the size of a Roth or any IRA?

[@janshuster1426]

There is no limit to how big a Roth account gets. If option assigned, stock is called away and I suppose you sell puts until the stock is put to you, then sell calls again

[@tomsettles6873]

Awesome video Joe. How can I run a simulation for 90 days to fine tune before I actually start using real money ? Thanks

[@mrahman7700]

"Never work again?" How's that gonna work when I reinvest the premium collected by selling covered calls?

[@digitalbots]

this has to be the best video for CC. Tanks for this!!!

[@MrMasterNorris]

Logarithmic view is very important to making sense of the graphs

[@lovellesg6790]

I'm a bit unclear, do you use the 100k to sell CC and then the premium you collect you sell to buy shares? Or do you sell more contracts of CC as your account grows?

[@markmusto2527]

I think he's suggesting buying more shares with your premium, which eventually allows you to sell more contracts, and the snowball gets bigger.

[@leestack]

Hey Joe, and love your work. Question - don't you think that new products like YEILDMAX, etc., will eventually drive option premiums lower and lower?

[@Hammyankee]

Quick question did your model take into account covered calls that got assigned historically? I only asked because I’ve gotten burned with getting assigned then watching the shares skyrocket shortly after

[@realestate_sc]

In this example you are only focusing on the returns from the credits of selling puts. Meaning, you remove loss opportunity completely from your trading gains.

[@seveninspires]

Great video thankyou. Q - From your analysis and experience, what do you regard as a min lump sum to be able to live off the income made via covered calls, eg against QQQ?

[@JumpStartJim]

Hi Joe, If someone wants to jumpstart their efforts, are TQQQ and UPRO reasonably safe alternatives? The ability to start selling CCs gives a current price at about 1/10th of QQQ and SPY. The Options are pretty volatile. (Up to 2% per week premium), but as leveraged funds, TQQQ and UPRO are riskier than QQQ and SPY. That said, I am curious about your opinion.

[@chrisk1569]

Highly volatile but I do it.

[@tonny9168]

Been doing covered call with shares of TQQQ. Just don't be too close to the money, 20 delta should be fine. Rolling up and out if the short call is tested. If you bought tqqq cheap, you can actually reduce your cost basis to zero if done properly.

[@dougsheldon5560]

Yeah, but what about missing out on all those deeply appreciative tenants you missed out on by not buying a rental home

[@darrenmc5424]

Sort of a misleading title, this assumes you will never have to work again ‘20 years from now’ not starting now. That said, I am not saying it’s a bad strategy. In fact i am doing something similar in selling poor mans covered calls on deep in the money options.

[@danlynch721]

Like this video. Can I get the spread sheet?

[@darylsage1618]

Can you demo on video writing monthly calls instead of weekly? I’m from Canada and monthly calls are allowable in tfsa accounts

[@SaRa-ms5zy]

Looks like this video requires a good knowledge already on options trading. Would be really beneficial if there’s a playlist that is sequenced to help the beginners …. Thanks!

[@JJ-io4pe]

Something that would be good to cover is drawdown since it is somtimes higher with covered calls strategies. Possibly on SPX, but definitely on NDX drawdown would be hard for most investors to stomach. Every backtest I have seen and every backtest I have ran on covered call strategies usually underperforms buy and hold. Maybe the backtests don't include reinvesting.

[@candlesbypurplerose1010]

Please elaborate - thank you

[@four5acp]

I've seen the same thing and you are right, I haven't seen any include reinvesting the premium.

[@db527]

Hi Joe, quick question I recently sold a covered call on CHWY at a $19 strike however when it went past 19 the call was not exercised so I'm a little curious as to why?

[@LP-ow3kd]

They guy or girl who bought your covered call decided to not exercise. It's happened to me.

[@Ardo23]

How can o learn this strategy ? Any recommended course ?

[@timritter435]

Hi Joe! Loved the video, I am curious when the option premium is used to buy shares. Do you wait for expiration or immediately after selling the call buy shares?

[@ericvinson4628]

This strategy (and Joe's analysis) is WILDLY DANGEROUS because every time your shares are called away, you stand to lose far more than you ever gained from the option premium. None of Joe's models ever consider the decimating effect of having your shares called away over time Do not do this unless you are an extremely sophisticated investor and fully understand how much upside you're giving away with these covered calls relative to the pittance you received from selling the options.

[@blockaderunner]

Well, in a taxable account.

[@ericvinson4628]

@@blockaderunner Are you responding to my comment? If so, what do you mean “in a taxable account”? My point is true whether an account is taxable, Roth IRA, 401k, traditional IRA, etc. The other thing to note is that options premiums in both traditional and Roth IRAs are taxable in excess of $1000 so please, please be careful.

[@blockaderunner]

If it gets called away. Just go find another stock or put it in a Money Market for a while.@@ericvinson4628

[@realestate_sc]

Wouldn't a bi-monthly approach mitigate this. Meaning going 2 weeks out? On the final week by Wed., roll or close position manually depending of where it stands?

[@ericvinson4628]

@@realestate_sc No I don’t think so - the problem is that if a stock runs hard past the strike price, there’s nothing you can do to mitigate unless you’ve got additional cash on the sidelines to buy back into the very same position you put at risk using the covered calls. But at that point you’re having to have sideline money uninvested, which effectively introduces another cost (in the form of an opportunity cost). My real point is that people should not just take it on faith that selling covered calls = easy money. I did a little covered call selling and quickly saw for myself that the upside of the money made on covered calls gets completely smashed when the stock blasts through the strike price. You’d need to win like 95% or more covered call sales (meaning the shares aren’t called away) in order to make more money then you lose, but the reality is that the shares get called a much higher percentage of the time.

[@adamfrost9048]

This doesn't seem to include shares getting called away in the modelling, or at least the cost of rolling the options when the market rips above your strike price.

[@Justsomeguy111]

Nice work. You just earned yourself a like and a new subscriber

[@offhamsterwheel2789]

why choose 2003 andd not 2000, y2k 2000 would have included the Dot Boom years esp for QQQ.

[@golfman6098]

Thank you for a straight forward explanation. I learned a lot and also opened my eyes to a great strategy that's very manageable. 🎉😊

[@quest_edward]

Excellent video.

[@SundayMoneyTV]

Solid strategy that I use in my Roth

[@ksmith169]

Great video as ever Joe. Have you considered selling ITM Puts with the same delta as a covered call? So simple example. 100 shares of QQQ = +100 delta. Short 15 delta call = -15 deltas. What about selling an 85 delta ITM put? I am experiment with this. It kind of feels wrong as I usually sell all my options OTM but I still think it needs to be investigate.

[@9Hatman]

good chart, but you do need to take into account how much more you pay in taxes every year by buying/selling constantly vs planting your money and not touching it

[@karlbork6039]

It seems possible if you buy in low. You still need a margin of safety.

[@hcky4life16]

I don’t understand how you are starting with 30 contracts of QQQ with 100k? That’s 3,000 shares of QQQ?

[@ronpietraccini7430]

Have you factored in taxes?

[@AverageJoeInvestor]

In this analysis no. This would be ideal in a retirement account to shelter from taxes on premium. THANK YOU for watching and for leaving your $0.02 in the comments! 👍😎

[@vonniofdoom5590]

All fun and game till the stock squeezes

[@marinrodriguez7729]

Taxes! Its all well and good for tax sheltered accounts but what about your regular brokerage account? It seems that your tax pro is going to need an advanced degree in quantum physics to track all the tax implications. Premiums earned are not all taxed similarly😮

[@shill1103]

isnt this what QQQX does and they are getting smoked by QQQ. Just owning qqq would be better long term

[@Klaster961]

I did the same calculations and your results are completely wrong

[@MrKaryos]

I agree he should use a backtest software

[@aperson1181]

WHERE IS YOUR DISCORD?

[@user-wt4kw4cj9w]

On paper everything looks great. In reality, nothing ever works out when it comes to the markets.

[@drewthorne1019]

so where were you when i needed you 20yrs ago

[@AverageJoeInvestor]

I was a 16 year old focused on making the high school basketball team and careless with money…LOL. I’m a constant work in process. 😉😎

[@Kk-iw4ck]

You can only get like 2 contracts nows price lol

[@Philson]

$0.02 dividends for you

[@ocuevas]

You're going to tell me in the span of those 10 years, the calls you wrote all expired worthless?

[@paulsypersma7165]

pathe tax they had to ,lodgic squad

[@bryanmoore9257]

I was going to watch your vid and 1 min in when you started with 100k im out. Be more realistic for the common Joe next time

[@hasankoc2733]

There are BIG holes in your so called CC strategy as few people already commented below. You might want to consider taking this rather misleading video down.

[@b4bmm]

We are coming to the end of a bull market so these results will never look better than how they look today with record low interest rates and money printing and low inflation

[@AncientAlien-]

Do not mess with covered calls. DRIP + steady monthly reinvestment is the way to go.

[@ankon212]

What I watch of this channel and found all content is a speculation and imagination. Nothing worth, just waist of time. Unsubscribed.

[@derMikester]

Complete bullshit

[@bidel1lee7]

U PEOPLE are on another planet

[@AmilcarPino]

Let's see ..... 🫵

[@AverageJoeInvestor]

THANK YOU for watching and for leaving your $0.02 in the comments. =)