Poor Man's Covered Call Explained - Proven Trading Strategies

[@wjohnson100]

One thing. You have to be long term bullish, and you have to be right. If you are wrong and the underlying goes south and stays there till expiration, you can lose up to (your entire investment - the premiums you get from selling calls). The advantage in that situation with owning the stocks is that at least they can recover if you hold them while an expired option cannot.

[@vogelv8267]

Also he doesn't mention with poor man's CC you pay way more commissions than trading stocks or conventional CC. It's because you can trade stocks on most US brokers commission free but not options.

[@ivantsanov3650]

Exactly

[@Compos-Mentis-123]

@@ivantsanov3650 wjohnson had no clue, when/why to set up a pmcc. You should prefer high risk/voltatile stocks (if that is in your strategy anyway, no recommendation). The option premiums are high, but it's in some cases possible, to catch the long running itm call with a relative low premium. Advantage: Lower risk. If the stock goes to zero...you only lose the itm call position. Recover ? Is there a law, that you can't create the next pmcc ? No argument. For example: Stock 50...you buy itm call strike 30 for 22...stock falls to 20. Pmcc lost 22. Stockholder lost 30....company goes bankrupt...pmcc lost 22...stockholder lost 50.

[@OnewAll_]

You got yourself a new subscriber. Why? Clear explanation, zero fluff, no background biography - video not one second longer than it needed to be. Thank you. Now I'm gonna go binge your other videos.

[@rockwelltradingservices]

Awesome! Thank you for watching! :)

[@Gatkee]

OMG i watched one of those the other day where some guy continued to talk about background of himself and his whole family but also testimonials one after another. OMG we get it...

[@zesanurrahman6778]

​@@rockwelltradingserviceslol nice

[@tywoodsgetgrants]

@rockwell me too thanks for these easy to understand videos. I️ just hate long videos and it’s just a bunch of fluff. But one question, how would I️ get my premium that I️ paid for the longer call? Do I️ sell it after my option expires?

[@AeoJx]

Agreed. Very clear and simple, showing every step. Thanks!

[@jaysosweet]

Seeing this video in dec 2023, and i got to admit this is one of the simplest, fuss free, straightforward, no nonsense explanation videos about covered calls and poor mans cc in youtube! You got urself a sub and lots of likes and viewtime sir!

[@rockwelltradingservices]

Awesome! Thank you!

[@buscadordelared3945]

Finally a clear, concise explanation, and no irritating sound tracks. Thanks.

[@rockwelltradingservices]

Awesome! Thank you for watching! :)

[@surefireoptions4187]

Nice video! Selling credit spreads is my favorite approach for consistent performance, but I like cash settled index options better as there is no assignment risk and offer more stability.

[@rockwelltradingservices]

Awesome! Thank you for watching! :)

[@Ivanesteva90]

What’s delta do you used

[@AnAverageDude]

As someone who already knows about covered calls, I still appreciated this video very much, fantastically explained!

[@rockwelltradingservices]

Hi Omar, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍

[@AnAverageDude]

@@rockwelltradingservices you're awesome, thank you for the education and most importantly your time!

[@rockwelltradingservices]

Thank you! :)

[@gregbabin365]

The chart showing all three together is so helpful!!!

[@rockwelltradingservices]

Hi Greg Babin, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍

[@alexmartins8182]

It has been a blessing to have the videos with Spanish subtitles. Thanks to that, I have been able to study and earn in dollars, spending in pesos. Greetings from Colombia and thank you very much for the teachings

[@rockwelltradingservices]

Awesome! Thank you! ;)

[@Arkstellar]

You're the best teacher of options I've seen. Great job.

[@rockwelltradingservices]

I really appreciate that! I try to make my videos as clear and to the point as possible. Thank you and have a Happy New Year ✨

[@garyroberts3014]

I came here after seeing the INthemoney channel try to explain this concept. He has no idea how to explain things to people who are trying to actually learn. THIS explanation in your video is a clear as can be. I really appreciate your hard work and your use of the charts and graphs and plugging in real examples. You earned a sub and a like, my friend - thanks so much, you are dynamite!

[@rockwelltradingservices]

Hi Gary Roberts, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍

[@VRTimeFun]

This was an incredibly well done video. I did skip a few seconds. But loved everything, honestly.

[@rockwelltradingservices]

Thank you! :)

[@kannansivaraman2313]

Markus Heitkoetter has a very

[@TurtleTasticGaming]

This was fantastic, you are the first person to get me to understand covered calls fully, and I like the poor man's CC idea! I love that you have the three different outcomes laid out visually, and you take your time explaining what happens in each scenario. Thank you for this valuable video, I will definitely be dropping a like now.

[@rockwelltradingservices]

Hi Shy ?, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍

[@Eric-sg9xt]

Good info. I also have to add that you sound like the villain from every 80's-90's action movie. You get a sub from me

[@rockwelltradingservices]

Hi Eric Holcomb, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍

[@justinorwen1141]

The South African guy from Die Hard, Hans Gruber..lol

[@freddiejonesy6168]

@@justinorwen1141 LoL!

[@kardon]

i understood every single thing. god why does other youtubers make it so hard to understand with their fancy languages

[@rockwelltradingservices]

Hi Kardon, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍

[@aruv76]

Yup, I had to stop watching 5 other videos before I arrived at this one. Markus did a wonderful job of explaining this. THANK YOU!

[@ymohsin]

because other KZbinrs don't understand the concepts behind these trading strategies as well as Markus does, great job!!!

[@adamnaughty]

Yes and his one of my favorite and actually believed in me and replied... his a good man

[@sentfromheaven00]

The jargon was invented by large institutions intentionally to deter retail investors like us from eating at their large pie of profit.

[@RameshRamloll]

You explain things at the right speed and very simply. Thanks.

[@rockwelltradingservices]

Thank you so much for the feedback! I try to make these videos as clear, and to the point as possible. I'm glad you're getting good information from them. 😀

[@jameslambe9275]

Best presentation on PMCC I have seen. Would be great if you can do a follow up on PMCCs addressing managing your positions such as when to sell your long call and when to buy to close your short call and then when to “roll it”. Also would be helpful if you can address other PMCC strategies regarding using LEAPS for the long call buy position and also pros/cons of using Delta as low as .70

[@alane3985]

I need to learn the following any recommendations for other channels?

[@hitmangfx7162]

Excellent breakdown. Very easy to follow. One thing to note: Rolling your covered calls at expiration unlocks a number of options. Either roll them down to a higher strike price or roll for additional premium. With PMCC, it's way easier to just completely eliminate the basis before exiting the trade. Also, I think settling for a lower delta on the long call is worth the trade-off of a lower opening basis. But this is a personal preference, I guess. I tend to calculate max profit as the difference in the strikes, without really regarding delta.

[@frankieslight]

excellent explanation but as many have already said below, You did not adequately explain the downside risk of the underlying going completely south.

[@peterdemic7139]

Amazing technique! Thank you Markus for sharing your knowledge in such an easy to understand way. Your channel is fantastic!

[@rockwelltradingservices]

Thanks, Peter! I appreciate the feedback. 😀 "See you" in the next video. 👍

[@Rocky532ms]

Very well explained Do you have any video about Calendar spread Buying deep in money longer month call & selling short month call regarding same stock

[@Slova99]

Not exaggerating, but I went thru about 15 videos to learn this concept and to see what happened when your covered call moves above the strike price...you are the only one who took the time to detail out the whole play with real life examples. Markus, you are the man! Thank you!!!

[@rockwelltradingservices]

😊 You are welcome! I am glad that this helps!

[@RJMH]

Wow, this doesn't have enough views. Super clear explanations and easy to follow along. easy sub, thanks for the video!

[@rockwelltradingservices]

Hi Mydoom, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍

[@sramirez1906]

Very helpful! I also appreciate you waiting until we've had a chance to watch for a few minutes before asking for likes/comments. Too many KZbinrs ask for likes/subscribes before I've even had a chance to decide whether I actually like the video. It's incredibly annoying.

[@rockwelltradingservices]

Awesome! Thank you for watching! :)

[@scoh840]

Thank you for this thoughtful lesson. Respectfully, didnt you skip half the equation? isn't a pmcc a short call , shorter term than long call, out of the money, combined with the long call. The short call reduces your cost basis? The whole thing is a debit calendar spread. The trick to learn is how to manage the two calls to maximize profit under a variety of situations. thank you for your consideration to my question

[@sukhjinder71]

Very good job. I just watched another guy explain this, and it took him 45 minutes. By the time he was done I fell asleep 3 times. You made this very simple to understand. You did a great job. I can't wait to try poor man's covered call. Thank You

[@rockwelltradingservices]

Awesome! Thank you for watching! :)

[@Sam-we4zy]

A good explanation but I would like to have known what happens if your PMCC gets called away at expiration

[@christianshope7810]

Yeah what happens!?

[@johncalvo1743]

That is actually a good scenario. All you have to do is exercise your long option into shares, and then they will be called at a higher price than you exercised them for. PLUS, you kept the premium for the short call. The only downside to this scenario is that your profit is capped.

[@chessguy1993]

@@johncalvo1743 Well you do have to be careful that your profit isn't less than your premium paid. Say you paid $7 per share for a 3 month call at 150 and sold a 1 week call at 152.50 for .80. If you get assigned you'd make a total of 3.30 on the premium+share profits but lose $7 on the premium you paid. In that case you'd be better off buying the 152.50 call back before it gets exercised and then you could sell your 150 call that should have increased in value for a profit.

[@marcohandmann4843]

Don't you need extra money to exercise the ITM option? I thought you are poor and almost all the money is in ITM calls. Or so you need margin, or does the broker step on? They also allow you in a Level 1 account to sell a call without owning the stock?

[@lucasgarcia6814]

If your PMCC gets called, most of he brokers automatically resolve it. You don't need to put more money because the profit you made with the BUY CALL is enough to compensate the SELL PUT, and 6 receive cash.

[@syshorizonenterprises7893]

You are very clear at teaching. One of the best teacher....

[@rockwelltradingservices]

Awesome! Thank you for watching! :)

[@robertm.496]

Great video, however what happens to your deep in the money option that you paid $7100? it loses value over time. You either have to either roll it continuously which will cost money or sell it at a lower price?? Don't you have to account for this expense in your calcs? Also is it possible to get assigned before the expiration date if the stock price goes way up? How would you handle that. thanks

[@mcgragor1]

Good questions, maybe he'll see it and answer or do another vid.

[@Huckleberry500]

I thought this exact same thing and I feel that without answering this, the video seems ingenuine.

[@Steve-be2tj]

Excellent.Can you show this example on NVDA stock please.

[@RicardoHernandez-zr1pw]

Great explanation. I actually started with buying regular calls and puts. I now discovered covered calls and will use them from now on. It seems safer than what I was doing before (buying calls and adding on the dips then selling them for profit).

[@knittingknut]

So clear. Thanks for this. The more I watch, the better I’m starting to understand.

[@rockwelltradingservices]

😊 You are welcome! I am glad that this helps!

[@hamsinisitini6613]

Markus - I think you have a way of explaining Options Trading that demystifies it and is easily understood by a layman. Could you also touch on Iron Condors, Diagonals and Iron Butterflies?

[@rockwelltradingservices]

Thanks, Hamsini. I appreciate the feedback. And YES, I will put it on the list and cover these strategies in one of the upcoming "Coffee with Markus" Shows. Make sure to subscribe to the channel so that you get a notification from KZbin whenever I release a new video. This way you don't miss it. 😀👍

[@Tramadoon]

Hi Markus, First video I've seen by you. Very nice. Thank you! Just one question, I guess you have to sell your 2 month call upon expiry of your short call? Will that have fallen by much? I guess by around 5%? Thanks again

[@XoXo2o3]

Thanks for the video but am I missing something here? The downside of the "poor man's covered call" isn't that you lose $650, but that you end up losing your $7100 (seems no different than buying a call without owning the shares...). You mentioned that they do not own the shares, and do not have the capital to buy it. At least with a covered call, if your original idea of the stock going up is incorrect at least you own the shares and they can recover over time as time goes on (and you're bullish which is why you're doing calls anyway). With non-covered calls you're ponying up $7100 with the risk of volatility dropping, or time decaying and no shares to pad the landing if the trade turns against you...

[@JC.72]

thats the exact question i have, if the stock price ends up with the same price or not move at all and time expires, your lost that $7100... if i understand this right, if u dont make $7100 which is the cost to buy the contract. u are losing money. however, i guess you can keep doing this every day or every week or month, until you recover that $7100 and some. but again it feels like alot of work to even earn that upfront investment cost back. and you are pressured by time and its expiration dates.

[@jjjw28x]

@@SuzetteSantori1 It was a major thing missing from this video and it lowers the credibility of the youtube for misleading the viewers, like a scammer. All the info in the video is correct which is good, but he needed to cover the devastating loss If the stock plummets like it has done with the current news about BA. It goes below your "bought call", you will still get the full premium from the "short call" (+$650) but you will lose all of the "bought call" value (-$7100) by expiration. As Xoxo put it, if you own the 100 shares to could hold on and hope BA recovers in a few years but with Poorman's CC, you will have to take the large loss. It's why he said its used for slightly bullish or bullish, not for a bearish scenario. If you do a covered call, you could do the "wheel strategy" cycling between covered calls till you assigned and then use the money for cash secured puts until you exercise it and then go back to covered calls. I should also note, if the stock does drop to zero, if you keep doing covered calls you could lessen the blow vs just owning the stock but in this scenario, in a bear market, you wouldn't do a Poorman's CC as its suicide. If you know there is no hope for the share price recovering above your "bought calls" by expiry, you can close the "bought and sold calls" ahead of time to reduce your loss before max loss.

[@kennethwedmorelund]

I really appreciate you time spent on this video - I'm was originally a teacher and I can tell that you're very good at teaching this stuff without any "get rich quick" tone to it. Just the facts. Instant like and subscribe for me!

[@rockwelltradingservices]

Awesome! Thank you, I really appreciate your feedback.

[@deinekes9]

Late to the party, but I'll still ask. What happens upon having the short leg assigned? Do you need to have the funds available to cover the transaction of the long call? Or does it all work out on the broker's end like without any further input from you as it does with a normal vertical spread?

[@jaredkingrombold6934]

yes i was wondering the same thing because you cannot sell a call of a 180 $ stock without putting up collateral in case your assigned ?? at 200 which would be 20,000!!!

[@TheSKT946]

Easier to understand than the others. They talk so fast and don't diagram it as nicely. Thanks!!!

[@rockwelltradingservices]

You are welcome! I am glad that this helps! :)

[@tmills721]

Excellent video! I watched it a second time today because it was so well done!

[@rockwelltradingservices]

Thank you! :)

[@djwashx]

this has to be the most thorough explanation on youtube it was excellent thanks

[@rockwelltradingservices]

You are welcome! I am glad that this helps! :)

[@laurenrupper6872]

Great video, what is the management on the long side?

[@kennyn.8233]

Understood selling the covered call and owning the stocks.. learned to buy in the money calls instead. Thank you for the tutorial

[@rockwelltradingservices]

😊 You are welcome! I am glad that this helps!

[@josh.kaptur]

One other scenario I wish you had shown - capped downside of the option vs the stock if we blew it and Boeing tanked below our deep in the money strike.

[@maxwelladams5114]

Yes same

[@capcrunch7838]

Pretty straightforward your out what you paid for your in the money call minus what you sold the covered call. Big win from a stock or an actual covered call. Both of those two your simply left bag holding

[@marcohandmann4843]

When you hold the stock you wouldn't need to realize the paper loss and just write more OTM CCs in perpetuity, until you hit you strike price one day. The poor man has to realize the loss due to expiry date. I learned the strategy is not for me.

[@kevinpyne5808]

Very clear, plus you talk in terms that the novice trader can relate to. Bravo sir.

[@rockwelltradingservices]

Thank you so much! I truly appreciate your feedback. My goal has always been to simplify trading and make it accessible to everyone, no matter their experience level. It’s great to know that the way I explain things resonates with you. If there's ever anything you'd like more clarity on, don't hesitate to reach out. Happy trading!

[@strhunter666]

what happens when the pmcc gets assigned?

[@connorlynch4695]

If the short call gets assigned at expiration, your broker should automatically exercise the long call. Because of the higher delta of your long call, you will still profit in this situation.

[@luismanuelmendoza789]

@@connorlynch4695 So your broker “should” exercise the longer call, buy the stock at the price that is DITM and then sell those stocks at the assigned call?? And you profit the difference? The other way to make money would be to close the legs right?

[@acjt7079]

Simple clear and concise. Thank you. One question if I may..... if I buy a LEAP can I keep selling poor mans covered calls (after each expires ) until the LEAP expires assuming the strike price of the poor mans covered calls that I sell aren’t met

[@tafwolf]

Excellent video! While i do get the concept, i am getting a hard time navigating through tastyworks. I already own a leaps of Apple but i dont know how to sell a covered call against it making sure that my long position is actually held as the collateral. I have seen people doing it with long diagonal spread for the very first call they sell. but how do you keep selling more covered call after the first sold call expires and make sure that your long position is the collateral? Do you just sell naked call and the platform is smart enough to pick up that you have a leaps to cover for it? Thank you!

[@braindroid9696]

I came to this video looking for an answer to this specific question. I went through the video and the comments, but don't see an answer to this. With Interactive Broker, it won't allow me to place the covered call holding the LEAP as a collateral.

[@IanSRutter]

WOW! What an explanation. I've subbed as you have made this so easy to understand. I'm studying Options now and with a few books and some courses under my belt, I can't stress enough how you have simplified Poor Man's Cover Call. I've just opened an account so I can practice with 'pretend' money. I can't thank you enough for this. It really has given me a confidence boost because at times I was thinking it must be me not being able to grasp all the terms and strategies over the last few weeks. Thanks again and look forward to your content.

[@rockwelltradingservices]

😊 You are welcome! I am glad that this helps!

[@Allen_lena]

Let me see if I got this straight: So you sell a call at an earlier day than the call you buy (which is really deep in the money). What happens if you get excercised on your sell option at a higher price is that you excercise your deep in the money call to cover, thus limiting your gains, but not by much. If you stay below the strike of your sell option but higher than the original prize, you're fine. If the underlying stock falls, but it's still higher than your option, your losses are limited. So basically it's the nearly the same risk as a Covered call, but the returns/losses graph is curved instead of straight lines due to the difference in IV between your short and your long positions?

[@entertainmentinternational1087]

Also I'm liking selling covered calls on stocks I either plan on holding or I planned on selling if the stock hit that strike price anyway. I think its win win to sell cover calls

[@MrRaja]

One of the friendliest video about covered calls. All the other videos are a little harsh in explaining how ever your explaining goes above and beyond just explaining.

[@rockwelltradingservices]

Awesome! Thank you for watching! :)

[@MrRaja]

@@rockwelltradingservices Is there a wheel strategy explanation as well? I would link that in the description. "How to use PMCC as a long term investment strategy." or something.

[@raywilliams3530]

What about Theta/Time Decay? How does that impact your long ITM Call?

[@mistletoe91]

Yep thats another devil variable

[@connorlynch4695]

Theta is small for long, deep ITM call. The farther out the expiration of the long call, the lower the theta value as well. If you're long term bullish on the underlying, it makes sense to pay a higher premium for a lower theta and more time for the underlying to rise (also, more time to sell short OTM calls). I would do 3 months at a minimum.

[@rhpmike]

@@connorlynch4695 Yeah, video has the ITM call at slightly under 2 months, which is probably too short as theta is going to start ramping up at 45 days. Worth paying extra here to go a bit further out and not being hurt on the time decay as much. Worth mentioning, though, you need liquidity on the option and the further out you go, sometimes the wider the bid-ask spread.

[@johncalvo1743]

Theta has a very little impact because most of the value of a DITM call is intrinsic.

[@briangoodman5260]

great! the only thing you left out is: what happens if the short call gets exercised against your ITM call? then you are short 100 shares of stock against a long call with 95 delta, putting you net short 5 shares. Do you have to exercise your long ITM call before expiration? or does the brokerage do it for you?

[@JimArnold6]

Should have covered with happens with the deep ITM call you purchased.

[@christianshope7810]

Yeah, what happens to the $7100 itm call???

[@brettelmerelmer3061]

Excellent video and explanation, Markus. One additional point, I may have missed it, is that when the sold option expires (assuming not exercised),you get to sell subsequent options that add to your returns. I love weekly options for this reason. You do make less on each sale, but more overall, with more management opportunities before the long call expires.

[@takarataylor2819]

Great tutorial! and your hair is fabulous LOL.

[@ronaldgreene5733]

Yours also

[@user-hv4jp6sm7i]

nappy ass hair sis go wash it LOL

[@alexpeters8983]

Hey Markus, quick question. So in the PMCC example, if the covered call above 200 executes, does your broker just take your ITM calls to cover? Or do you physically need the capital to buy the 100 shares ITM to then sell at the 200 strike? Thanks.

[@jabsnana8465]

Everything is good and dandy in THEORY except there's gonna be ZERO Volume or Open interest at the $110 strike price (.94 delta).

[@bluestarindustrialarts7712]

Usually that is correct. Any delta over 75 is good for this. Im happy with a .75/dollar move towards profit when I'm about 80-90% less cash outlay. (than if i bought the stock)

[@johncalvo1743]

That has no bearing. If you have trouble closing the position, just exercise the option. I do this often to teach the MMs a lesson. A stock like RH is notorious for trying to overcharge you when you try to close out a leg.

[@JonathanScheele]

@@johncalvo1743 It has bearing if you don't have the capital to exercise the option, which is a reason why many people do the PMCC in the first place.

[@johncalvo1743]

@@JonathanScheele There have been many times where I don't have the capital to exercise. My broker allows me to exercise, then flatten. It all comes out in the wash.

[@edmandell3064]

Great Video. If your bullish on your long position of the PMCC is it better to close the short position if the stock runs up rather than allowing the brokerage to exercise the long position to cover the short ?

[@samuelbazinet3033]

If you're doing a PMCC you should pretty much always close out your short call or roll it forward to the next expiration.

[@sinmaan7568]

How does it work when you get assigned? How do you evaluate the profit/loss? [Short call strike x100] - [long call strike x100] - [cost of buying the long call option] + [any premiums generated while holding the long call] ?

[@jacobdavid]

Interesting video. Easy to understand. Question: So when you decide to SELL the deep ITM Call to exit, what is the scenario at EXIT? How much money do you get back in the 4 scenarios? Does Theta decay affect anything at all? 1) Stock up $10 2) Stock up $20 3) Stock down $10 4) Stock at same price. Please explain. Thank you.

[@yoireroque3746]

Very clear explanation. How do you close a Poor Man Cover call? What happens at the expiration of the call deep in the money?

[@rockwelltradingservices]

Great question! Closing a Poor Man's Covered Call is straightforward once you know the steps. Here’s what to consider: Closing the Call Option: If the short call option is deep in-the-money as it nears expiration, you can buy it back to close the position. This limits your risk of assignment, though assignment is always possible with ITM options close to expiration. Rolling the Call: If you still want to hold onto the PMCC strategy, you can roll the short call to a later expiration date or a different strike price. This lets you continue generating premium income. Letting It Expire: If you let the short call expire in-the-money, you’ll be assigned, meaning you’ll sell the shares at the strike price. Since you don’t actually own the stock, the assignment will sell the “long call” position at that strike, and you’ll realize a gain or loss based on your initial entry price. At expiration, if the call is deep in-the-money, be ready to decide on rolling, closing, or letting it expire and accepting assignment. Each choice depends on your goal for the trade and how you feel about the underlying stock’s movement. Let me know if that helps or if you want more details!

[@Sifatullahsolo]

Hi Markus, Just wanted to say I love your videos! Your explanations are top-notch, and watching the trading screen in action is a game-changer. Keep up the great work, and thanks a bunch!

[@rockwelltradingservices]

Awesome! Thank you!

[@ericd4020]

Very helpful! Thanks.

[@rockwelltradingservices]

Hi Eric D, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍

[@satinderbank4607]

Very well explained. I pretty much understood the Covered calls and Cash secured puts but had a hard time wrapping my head around PMCC (poor Man's....). You Sir, Explained it beautifully. Thanks for your efforts and God bless you with success and happiness.

[@rockwelltradingservices]

😊 You are welcome! I am glad that this helps!

[@balajisridharan9790]

One thing, probably the most important thing I feel was missed (maybe I am wrong) is that in both 1 & 2, there is equity, an asset which we hold on to, which is 100 stocks of Boeing. In the third scenario, there is no such asset because we have to exercise our September option, in order to fulfil the July option. In August or September, if Boeing goes up to 200 or even 190, both 1 & 2 still have the stocks which can be sold, while 3 does not! This is an important difference.

[@andrewpm2]

This has me rethinking my entire investment approach. This seems like a good strategy to compliment the traditional buy-n-hold strategy.

[@rockwelltradingservices]

Hi andrewpm2, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍

[@laughtertherapy4570]

I am right now in covered call phase and did it twice ...came here to learn poor mans covered calls 😁

[@rockwelltradingservices]

Hi Laughter Therapy, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍

[@ron2040]

Great video, Markus, do you wait till it expires or close it as long as it hits 50% under P/L? When you close the price reaches 200 and above, you close long call and short call simultaneously, right? Otherwise, we just sell call again. Hope I got it right 😊

[@chiefetwful]

Best explanation of the PMCC I’ve seen!

[@rockwelltradingservices]

Awesome! Thank you for watching! ;)

[@marksplayground]

What program are you using for your risk graph?

[@johnshadow9310]

Very well done clear explanation with concrete examples covering multiple scenarios. What platform are you using? Thank you

[@rockwelltradingservices]

I am using Tradingview and PowerX Optimizer in the video. But as updated we already have integrated with Tradier.

[@margaretplasota]

super nice and easy, I am a big fan now. Where can I get help? I would like to start trading covered calls.

[@rockwelltradingservices]

Hi! You should check my audiobook here loom.ly/5CLflsc

[@jakeangove1938]

This I a great video and channel, thanks for that, the only thing I don't understand is with the poor man's covered call, want you lose the initial investment of 7100 when the call runs over expiry? That means you won't make money unless you've sold enough calls to outweigh the initial investment?

[@HadenYasser31]

What happend if I get assigned in the Coovered Call? Does my CALL then exercise automatically?

[@gasser5001]

You can tell your experience thru how easily you teach this. 10/10. Liked and sub'd. 3rd video of yours I've watched. Great stuff, Markus.

[@rockwelltradingservices]

Thank you for watching and subscribing! 😊

[@teok6585]

Nice video. I have a question: What happened to the call you Bought deep in money? If the stock went over $220 and the option you sold was @$200 on expiration day, do you get assigned the option you bought deep in money ? or is the option you purchased taken from you? as a normally covered call, in this case, stock gets taken away if a stock goes over $200, in this case, you don't own stock, you just bought a call the option you sold 3 weeks ago is more expensive on expiration day because the stock went over$200? the option you bought deep in money is also more expensive as well stock go over $200 can you explain please, thanks

[@eytanlavi6778]

best teacher best explanations

[@rockwelltradingservices]

Awesome! Thank you for watching! :)

[@lucauau]

One of the best video on the subject I’ve seen so far!!! Thank you!!! 😊 I have a doubt: what happens to the long call options bought when we approach it’s expiration? I presume time impacts negatively on the options value.. am I supposed to sell the long option once the short call has expired? Basically.. how am I supposed to manage a PMCC in the different scenarios?

[@daveforeman6931]

Nice, simple explanation. Been doing Puts, have been curious about Call- now I will try it on something. Thank you for doing this video.

[@Sonia-cd6rt]

Great Video! My question is what happens when your short term call expires in the money and you are 'short' the shares? thanks

[@prodiqi]

I've been trading for a While and I just learned something new. Great video sir. I never noticed that if I were assigned on the call option if the stock price went higher that I would still be profitable. It makes sense you bought at 180 and now you're being forced to sell at 200. Which is still a win. Awesome 👌

[@rockwelltradingservices]

Hi Brent, thanks for your feedback. Much appreciated. And yes, you can still make money on the stock in the scenario you described. You got it! 😀👍

[@Chris-jo3nb]

Nice video, thanks. One thing to point out: There is a big downside - if the stock drops the poor man's covered call will expire with a permanent loss, whereas with the stock or covered call you still have the original asset (which is a temporary loss that can of course rise later.)

[@rockwelltradingservices]

Hey Chris, yes, good point! Thanks for sharing. 👍

[@justdowhit1]

So for a PMCC you buy a call deep ITM at a far out expiry date.. What i dont understand is in your chart you have to SELL a call at $200 strike price? Do you have to buy AND sell a call for this strategy? because I thought to sell a call you need 100 shares minimum to do that. Thanks for all the info!

[@bearwalker2008]

Thank you so much. Explained simply. Very clear to understand what you are saying and makes so much sense.

[@rockwelltradingservices]

You are welcome! I am glad that this helps! :)

[@noahgiamei]

Excellent presentation. Thank you for explaining so clearly.

[@javierarellano4472]

I don't know why I hadn't seen this video sooner but glad I came across it. What I don't understand is buying that deep in the money, there isn't much open interest to be able to buy the call. Am I missing something?

[@R1pTheJacka]

Thank you Markus!! Absolutely incredible. So if I'm understanding correctly - in your PMCC scenario if the stock goes above 220, the trading platform would automatically exercise the 110 call, so that you would have the collateral needed to sell the 200 call?

[@rockwelltradingservices]

Hi there, great question and NO, the platform would not automatically exercise the 100 call. You have to notify your broker that you want to exercise it. If it's above 220, you can just close the whole PMCC on the day of expiration to avoid any assignment issues. Does this help?

[@poohbear2441]

Oh Thank Heavens I found someone who goes in details to explain cover call and poor man strategies. I have been watching few videos and I did not get it because they didn't go in details!! Thank you so easy to understand and showing the example helps!!!!!! BUT I do want to add that if you do a cover call and price goes up to 190 you wouldn't really make 1,450 because the call have to be executed meaning the stock would have to go to $200 since you did a cover call/ sell call for $200. Isn't it once at the expiration date the stock goes up above $200 the cover call will be executed therefore than you would make extra $20 per share x 100 = 2000 + 450 (premium)= Total gain is 2,450.

[@rockwelltradingservices]

Awesome! I am glad that this helps! Are you subscribed? Markus and Mark do live updates here daily.

[@ariccai6527]

What about when the stock goes down with a PMCC? Why don’t we look into that more?

[@xiaoliyang-pk8tv]

Hi, Markus Heitkoetter,buy long call,choose the delta as big as possible,but which short CC should I choose to sell is best???

[@HoopsMcCann-p4g]

One of the biggest downsides to buying a deep in the money call (.95 delta) are the spreads between the bid and the ask. They’re often extremely wide, and this is confusing to new traders. Because buying with a wide spread is literally throwing away money to the broker. You’d be much better off just buying 2 delta .50 options (at the money or first strike in the money), they’ll have the highest open interest and therefore the tightest bid/ask spreads, and they’ll function like that 100 shares you described

[@levsandler8920]

Great explanation! bless you from Israel. Only one question left: after the short term call expires should you also close the long term call position?

[@rockwelltradingservices]

Thank you! :)

[@randylim2840]

Very clearly put out. Thank you! Can share what is the trading platform u showed in your video? Looks good

[@financeabcs]

New to your channel!! Love to talk about options!! You have a good way to explain things. I was wondering what all the “yes” in the comments were until I heard the entire video. Liked and subscribed!!

[@rockwelltradingservices]

Awesome! Thank you for watching! :)

[@scubafreak127]

One of the best explanations I've seen yet! Very easy to understand. Would love to see a follow up of how or why to make adjustments to the short call side to adjust the cost basis.

[@HungryHippoo]

Hello, could you explain something to me, when I buy back my option from a covered call at a loss, to reroll the strike or the date to next week, my broker adds this to my short term losses? This is not great as I frequently buy back my options and I do not frequently sell for capital gains, this is a huge disadvantage as we can only claim a $3,000 total loss on our taxes correct?

[@gabriellim7204]

Hi Markus, good content. If the price stays at $180, is there any profits at all? What is the breakeven stock price?

[@rajeshsadhna]

Please elaborate if the covered call is assigned how leap option will be able to cover the assignment. I am sorry I did not understand the last scenario.

[@thirupathivarma3024]

I really learning lot of subject in options trading from you. The way you explain with notes is always crystal clear. I got my best teacher similar like my college learning. Thank you so much Markus for all your precious information. 😊😊😊

[@rockwelltradingservices]

😊 You are welcome! I am glad that this helps!

[@jun9098]

You explain very well. I never trade options, yet, but I can understand. I felt it is also applies to trading field when the person knows what he's doing can explain easily. Awesome!

[@rockwelltradingservices]

Thank you! :)

[@259Yee88]

Correct me if I'm wrong, with the actual covered call when you have the 100 shares, it's ok to get assign to sell at a cap profit of $2450 @$220. But when you do pmcc, you need to come up with the 100 BA shares to sell to your option buyer. You have not explained the most important part. Lastly, what will be loss or cost involve for this naked call in pmcc.

[@chrisettner2934]

Great video. What is your thoughts on doing this strategy with ETFs?