Selling Call Options - Covered Call Example by a Pro Trader

[@stevegagliano9532]

I have been selling call options on Tesla, Apple, Visa and making an extra 2000 dollars a month.

[@InvestwithHenry]

Boss

[@Kangman02]

I'm trying to get to this level. Great work man

[@MajorStra]

@@InvestwithHenry so in this example of TSLA you sold 1 call option at 3.4 premium, if it expires you make $340. So if you have 200 stock in TSLA you could do 2 sell 2 calls and make $680? Talking about the limit price didn't make sense to me. So those numbers are what other people are asking and bidding for this call that you will sell them?

[@InvestwithHenry]

@@MajorStra correct

[@walidnazmifordigitization5204]

in my case i didn't get to keep the premium, trying to figure out what happened

[@persieprince9345]

I never understand this topic until i found your videos now i understand selling puts and covered calls your videos saved! Thank you for explaining wonderfully

[@InvestwithHenry]

Very happy

[@kokosthoughts]

so I bought 100 shares of tsla like the person who purchased from you and after the expiration date say my prediction was correct... I now own 100 shares of tesla and can now sell options just as you did..

[@MFEeee]

I saw this video a year ago and wasn’t confident because I didn’t fully understand the process. I watched it today and I understood each point. I am now ready to start selling covered calls

[@j.c.2214]

uncle Henry your explanations are the best so glad i found your vid. blessings

[@rividin8416]

Wow amazing video, I’ve been doing options for almost 3 years and just figured what selling a call means after watching your video, thanks 🙏

[@crystaldeweever4691]

Best video thus far , you got yourself a new subscriber sir . About to binge on your videos

[@sirisilva9580]

Great topic! what happen when stock decline below the price you brought? Pls explain that as well - in selling covered call session! Thanks Henry!!!

[@robertlake8796]

Thank you. Very clear, showing a working example definitely helps.

[@terifong9816]

Very very helpful, thanks again Henry !

[@lenspicks]

I have 500+ shares of AMC thinking about selling 5 covered call options for 65 strike then taking the money from the sales and buy additional shares since it down as of today question good strategy or no

[@JCFP3000]

I’m totally new to call options so my question , can you buy a call option from any company?

[@infamist]

Good video for both buy and sell calls, and that there is an expiration date. But you need to elaborate on that expiration date. If I sell a call of Tesla and the options buyer meets and exceeds the strike price BEFORE the expiration date, does the buyer continue to earn on my upside for an indefinite amount of time? Or do I get the full rights to my 100 shares back even if the stock price sky rockets past the expiration date?

[@thepixalking6589]

Same question.

[@SY-sp8uo]

Who's started investing this year? 👋

[@YB-eg3rj]

Turkish?

[@tonyli927]

Me!🙋🏻‍♂️

[@M0HAK0]

Me

[@charanguero913]

🙋🏻‍♂️

[@justustoh7156]

Me

[@Issa82]

I have a question, using the same Tesla example. Lets say by end of expiration the Tesla stock doesn't hit $500 and tanks below ur average price of $433. What happens and how much do you lose? also can you cancel your order after its placed if you do not want to sell your covered option? Thank you for all the info!

[@boubkersdidi3295]

that's really good question .I think, sell calls your not going to loose money even if it goes below your stock price.

[@michaeldevry6644]

Henry, excellent video in explaining this. Thanks for sharing the knowledge. I wish I found your videos last year. A great tool to add to the investing arsenal.

[@saadrubaead6420]

Hi Henry , my question is if the option is exercised do i still get to keep the premium? Suppose tesla price reaches $502. And have to sell them for 500 . But do u still get to keep the premium?

[@ostrovrealty9168]

Very nice video. Thank you. Please let me know about your next one.

[@Digitalgems9000]

Ty for the video Henry, by the way that's my middle name lol. What happens if it reaches $500? You have to sell 100 for $500? What happens if it reaches $515? You have to sell 100 at $515 or $500? Forgive the noob questions, still learning a bit.

[@JeremyLanger]

Really great video, easy to understand. It seems like you do need more capital up front (ability to own 100+ shares of a stock), but that passive income is pretty great. It's basically an asset at that point. How do you find the most profitable stocks to sell covered calls for? Maybe somehow sorting stocks by implied volatility?

[@holysmokes6709]

You can do that but you'll blow up your account those options have that IV for a reason.

[@gsxrsociety1473]

dude, this is amazing info. thank you

[@LS-el6cq]

Henry please tell me is there a way to sell options with limited experience? Most brokerages will not let you trade level 3 options with less than a year of real-life options trading experience.

[@freE20121]

What happens if TSLA goes below 500 or strike price? Thanks so much. I am new to your channel and I just subscribed.

[@InvestwithHenry]

You keep the option premium and can sell a call again

[@markherring3513]

I have 450 shares of Tesla but dont want to let them go....I want to do this....So let me ask, is $342 all you could made off that one contract? Is that how it works? Once you put up to sell 1 contract (100 shares) and you collect the $342.....and lets say by the time the call expires tesla went to $490.....so you keep your 100 shares and $342 was the most you could have made and still get to keep your shares?

[@kovaks1483]

I really like to learn this, is Robin hood the best place to do it?

[@susaneluwa]

When your shares get called, do they automatically take it when it is assigned or is there something you have to do?

[@InvestwithHenry]

Automatically

[@ericchow1218]

@@InvestwithHenry does that mean that you will automatically get -100 tesla stocks and +$50,000cash plus premium when it get called?

[@existencewarrior]

Hey Henry, I don’t have a Margin account, can I do a Sell Call Option by just having a Cash acct?

[@mysteryman_ph]

Hi Henry great presentation and now I watched your buying and selling options, can you please do presentation of Poor Man Covered Call. If you can do an actual example that will be great. Many Thanks

[@InvestwithHenry]

Sure!

[@argentinarodriguez4170]

Is it possible to do the Poor Man Covered Call with Tesla?? Thanks!

[@gregzr-one5922]

how many covered calls can you sell a month, is there a limit? it seems so easy that if you have over 100 shares of all different stocks it's a no brainer to sell covered calls way out of the money to just collect a preimum and in the end you still keep your shares, so do some brokers limit how may you can do or is it unlimited? great video too....

[@InvestwithHenry]

No limit

[@gregzr-one5922]

@@InvestwithHenry thank you!

[@VIDEOSLDHUKE]

Hi,so I need to own the stock to be able to sell a call option ? Thanks

[@Ka_Gg]

Just found you recently and watching some videos. Looked back at the expiration date and the stock didn't hit anywhere near $500 so you got the $340 and kept your stock....so "free" money! Good job. I'm looking more and more into this. Currently making a spreadsheet and watching some call options (paper trading) that end on 5/7. Going to research more. Thanks for the video

[@markherring3513]

His $340 would never increase as it got closer to 500? So the $340 premium is locked in and cant go higher or lower regardless what the stock does? (I own 450 shares of tesla and dont want to let them go...im thinking of doing this with the 90% chance i get to keep the shares).

[@marialee124]

Is it better to sell covered call when the stock is bearish or bullish or it doesn’t matter as long as you have the 100 shares?

[@fishmut]

As i understand it 1 contract is 100 shares , 2 contracts 200 shares so if you buy or sell for every contract is 100 shares each.

[@takakazushi6703]

Henry, great video as usual. But we have to do something about the mid roll ads. There were four of them this time. Please promise me your upcoming paid options course will have no such nonsense. Thank you.

[@InvestwithHenry]

The options course has 0 ads. It's not going to be on KZbin

[@oloscarlopez8]

Just pay for youtube premium. It is only @12 dollars.

[@takakazushi6703]

@@oloscarlopez8 I don’t know… Think Uncle Henry would say its better to invest the $144 per year (and rising) in the market in order to get STO O O OPID rich faster.

[@Younified]

Pay the 10$ a month for no ads!

[@mfm5647]

@@Younified During its start up days in the USA, Cable Television promised "All your favorite TV shows WITHOUT commercial interruption for a small monthly fee." How's that workin out America?

[@Hustlin87]

Thanks Henry, good video!

[@miss_nobody9876]

What if the stock is dropping instead? Do I still get to keep the premium?

[@RunnerProductions]

hi, so im confused when people buy the premium, why it was 10x? who came up with that number? So basically have stock as collateral seems like a win win

[@brylythhighlights4335]

Wouldn't this be quite risky if the stock goes down, though? Would you be unable to sell it at all, or is there some mechanism where you can reach an agreement with the other side of the option so that the stock can be sold?

[@walidnazmifordigitization5204]

Dear Sir, My broker is ETRADE, here is what happened. Owned 200 shares of ticker SOLO, and sold 2 calls against it to collect a premium (0.42 X 200 ), at expiry the underlying assets price didn't appreciate to the breakeven point. As learned from your video, i get to keep the premium but here is what happened. Received - $84 i found it's being bought to close in the trade history for 0.30 Paid to close - $60 My P/L is +$24 which means i don't get to keep the premium i received?

[@Visualxposed]

Can you lose money? If you’re out of the money when it expire? Sorry newbie here.

[@InvestwithHenry]

not on the option. Only on the stock if it is down a lot. Options still better though

[@yoo131]

hi henry, do you have to have at least 100 shares in order to do this?

[@InvestwithHenry]

Yes

[@PhilipOberg]

I would like to learn about how to sell options. I currently have an investment of 885 shares @ $27/share with Ballard Power on the TSX exchange in Canada. This could help me earn a monthly income - but I do not want to give u pmy shares - perfect? Right UH (Uncle Henry) ?

[@InvestwithHenry]

That's right. You might want to look at my website or playlist on youtube.

[@PhilipOberg]

@@InvestwithHenry I had to watch this video about 5 times - but I get it now. I bet you have been watching Ballard along with your Hydrogen stocks. My Dad - has been on Ballard since the 90's I think. He has a position of several thousand Ballard shares @$7/share price! I am in Canada - so talking $CAD and TSX. Ballard is at all time highs this week - over $50 on TSX and I am really happy for the Old Man haha. I think both me and the Old Man should learn how to Sell Call options to make income from Ballard Power shares instead of just sitting on them. Hard to convince Dad though both my parents are fairly conservative with their money.

[@PhilipOberg]

And just to add one more point - this would be a great way for Dad to generate income during his retirement, while maintaining his position with the stock that he is so proud of

[@isabelj411]

Subscribed! Thanks for sharing!

[@DailyMeditation365]

Is the best outcome that TSLA hit $499, you keep your shares and the premium, your shares have increased in value, and then you can sell another way OTM call option and profit again?

[@fridayjuniorjuniorfrizzle9272]

So you make money as it goes up along with collect premium or you only collect premium and no difference of price if it shot up?

[@matthewgarcia9494]

Do I have to have stocks in x to sell call options? As in..do I have to and buy 100 stocks in x and then sell the call option?

[@andrewchin3972]

Thanks for the great video. Was wondering if you could do a video on how to trade options if our accounts are small and can't do covered calls for the stocks we want. Thanks!

[@sb2in]

Hi Robinhood is not available from India please suggest another broker with a paper trading

[@michaelfeuerbach7233]

Great covered call video!!

[@InvestwithHenry]

Thank you!

[@Magicgathers]

Will some execute a contract if they don’t hit the break even price?

[@atatopaul1227]

what happens when the stock reach your strike price at expiration? and why do you have to buy back?

[@zakkaslow8570]

If I am selling a covered call option does it matter what I paid for the 100 shares? Assuming I only sell covered calls on SPAC's Example I own 700+ shares of PSTH at 22.19. Am I better off selling a (1 or 2) 35 call option or a 22.50? I don't care if it gets exercised.

[@mikekeenanphd]

On Oct 23, TSLA closed at 420, so well done!

[@snc4278]

Just caught your vid. How often do you sell covered calls on dividend stocks? It seems like it could be lucrative. Although some of them only give you a bite of the Apple once a month.

[@SergiiStarodubtsev]

can you normally sell call opt on your retirement / tax sheltered account? (did not work in Canada. i guess it is mostly for cash/margin accounts?). Thanks! Nice video! Better than many out there.

[@fzrniko]

Then Question - if I own 100 shares of stock xyz @ $20, and one month sell call option is $.80 @ strike $30, I can sell option contract. If stock reaches $30, the option is called and I make $10 x 100 shares, minus the $.80 per share? That’s like almost 50% return. Is this right?

[@TheJacemer]

Probably a dumb question here- are you using your already owned stock to sell? Which would be also answered by a more general question, is there anyway to lose the stocks that you already owned through covered calls?

[@InvestwithHenry]

Yes I am!

[@TheJacemer]

Invest with Henry so then you will be using your already bought stocks to exercise the option right? Want to make sure I fully understand this before I dive in! Thank you for the quick response!

[@michaelberta4943]

So do you still have these TSLA shares? Since this video the stock went up quite a bit so I would think that someone else has your shares now?

[@TheJacemer]

Hey Henry, I have a question in the video you don’t exactly go over any negative outcomes that can happen from a covered call, are there any risks?

[@InvestwithHenry]

Not really other than selling the shares higher and losing them higher

[@TheJacemer]

Invest with Henry regardless you still get the money from selling them correct? really just trying to figure out why everyone doesn’t do this, since it’s kind of a “everybody wins” scenario haha

[@jville9788]

What if you accidentally made a sell call option with lower price and expiry in a week? The current trading price is higher. Let’s say currently, xyz @47 -- then you made a sell call for next week @ 40. What will happen?

[@rt-uh6mt]

The only big risk is if you sell a covered call in something like Gamestop and it goes up $100 in a week. If you're strike price was say only $20 over the current price you'd miss out on $80 in gains. But of course, those situations are rare.

[@safeTmeeting]

can you lock in some profit and keep your shares when you sell a call?

[@growwithrobert1572]

So if the stock dosent reach $500 you keep the money and the shares?

[@InvestwithHenry]

Yessir!

[@bingbong3643]

@@InvestwithHenry what happens if it does reach 500?

[@noobcanadiantrader4182]

@@bingbong3643 it goes to the buyer that bought the option cause the buyer was right if he exercises it

[@bingbong3643]

@@noobcanadiantrader4182 Thanks.

[@suukithesamoan2327]

@@noobcanadiantrader4182 do you get to keep the profit of the shares? Like if I had 100x$5 and it reaches $6 and fills, do I get $100 profit plus the premium.

[@codyzick239]

If my break even price hits I still keep premium and don’t lose anything as long as break even is above my average buy in?

[@bangagurl]

So if the stock doesn’t reach the 500 strike price does that mean you keep the premium and the Tesla shares?

[@davidleonard4925]

You get to keep the premium and the shares.

[@kollc7936]

i have a bit of a question.. lets say i selled a call option with collateral of 100 shares. at strike price 5$ well the market for it turned extremely volatile and its already skyrocketing up do you think it will get exercised due to volatility or do you think itll expire worthless because no one will pay that high of a premium to buy shares at 5 if its skyrocketing up like that. hoping volatility will help me not get exercised since volatility makes everything more expensive lol

[@Tbone1044]

so the only confusing thing is if it hits the strike you have to sell? But if they cant afford to buy you still keep the stock and they keep the profit from the stock going up i guess? So if you buy an option you can either buy or not at the end? like the 11000 apple in your buying vid. its 200 to buy the option but then if it hits you need the 11000 to buy it or can just take the profit? is that why its called an option or am i completely missing whats going on. Im asking cause id like to sell cause i dont care about the profit from the stock but i want to keep the stock long term.

[@nymel2008]

Are we selling weekly or monthly options?

[@maxinxin1231]

Love ur videos! I've bought call options recklessly before earnings report(NIO), betting that it will go up, which lost me a whole lot of money. I have educated myself and earned it all back in a few months, but I still have lots to learn. Can't wait for your series about trading options.

[@Mathewtrades]

hey bro what would some tickers be that are like $30 and under because most people arent going to be able to afford 100 shares of blue chip companies to sell covered calls on.

[@davidt7348]

I am a little confused, does the contract of 100 shares sell when the stock price hits $500 (strike price)or when it hits $503.38 (break even)?

[@InvestwithHenry]

Yep on the last day

[@Brandonklinger]

What if on the expiration date it doesn’t reach 503.38? Does it just sell to whatever price it got up to ? Example: only reached $400

[@richardkincaid2575]

What if u sold a call you of a company. Simultaneously bought a call of the same company and the next day try to exit to take a profit but on the call I bought , all for robinhood to tell me I don’t have enough shares And won’t let me get out of the trade?

[@RegencyWealthManagement]

Great video. Slightly confused though. Using the example if Tesla goes up above your break even price you only make the premium, and loose the stock. When if you still held the stock you would of made much more from the growth in share price. I get you used a far away strike price to prevent this. Yet you said you benefit if the stock goes up, well you only benefit if it doesn’t breach your strike price then you get option credit and share is worth more. Yet is assigned you really loose out. Am I right or missing something?

[@InvestwithHenry]

It's okay if it goes above the strike you just stop making money at that point but keep what you have earned

[@RegencyWealthManagement]

@@InvestwithHenry yet we would of made more money than the premium received if still holding the stock. rather than only receiving the premium and loosing the stock. It would be much better to hold stock in regards to % gain? This is where you loose vs stock investing but you have not lost money even so?

[@suukithesamoan2327]

@@RegencyWealthManagement it means you get the premium immediately by agreeing to sell your shares if it fills. If it does not, it is free money.

[@mimiandmommy4281]

Matthew, he wouldn’t only make the premium if the stock shot passed $500 strike price, but the $70 on his 100 shares that he would have to sell at $500, which equals to $7000!!!! The stock is trading at around $430 at the time of the video.

[@Digitalgems9000]

@@mimiandmommy4281 oh wow, so if it did go past $500, he would only get $7k instead of selling them all at $43,000?

[@musicislifeproductions3602]

When will the premium I recieve be reflected in where it says Investing? I see it In my buying power but it does not reflect in where it says investing yet. It is a call I sold for gsat. Its a .5 call I sold expiring on january 15th. Im a novice

[@marknevin8947]

I don’t get the break even thing.. if you already had the stock at 100 a share and it hit the strike price at 110. Wouldn’t you have to sell that at 110 a share so 11000-10000 which would = 1000? + 5$ premium so 1005$?

[@BobinhoodStocks]

When you say the break even price is $115 the premium is 5 bucks are you already multiplying that by 100 if so then the break even would be $110.05 if not then the premium would pay you 500 buck overall for 100 share collateral just double checking

[@InvestwithHenry]

Correct you need to multiple by 10 shares. So 5 bucks is $500

[@clutchspwnz6971]

What if it drops below your price ? Do you lose money? And if it sky rockets above $500 you have to purchase 100 shares at $500?

[@InvestwithHenry]

No you lose your shares

[@MaxLoopTV]

Wow you could have sold tesla call for $800 but thanks for the video, can i do this on my penny stocks?

[@InvestwithHenry]

Not all penny stocks have options

[@jorgesoto1231]

Question so I just sold a call on agen for 20 shares I did a 3 call it’s at 260 strike prize 365 on November if the stock prize goes over 365 do I loose everything ? I received 1300 premium

[@InvestwithHenry]

Not necessarily

[@jorgesoto1231]

@@InvestwithHenry so in that case let’s say the stock goes to $4.60 do I loose my money or I just loose the gains after the strike prize and buyers get that proffit

[@michaelpark1764]

so lets say you sold 1 put option and you are forced to purchase 100 shares because it fell below the strike price you would then sell calls to collect premiums and sell 100 shares?

[@Digitalgems9000]

what was the $7000 part? confused a bit ty

[@ashleysmagicalworld5052]

Thanks god for people like you. I'm actually learning a lot throwout your videos.

[@stevev707]

thanks for the information

[@InvestwithHenry]

Always welcome

[@argentinarodriguez4170]

Can I sell Tesla covered calls having less than 100 shares, please? Thanks a lot.

[@InvestwithHenry]

100 shares only

[@argentinarodriguez4170]

@@InvestwithHenry Thanks! What about the Poor Man Covered Call with Tesla?

[@InvestwithHenry]

Great too

[@Nick3d1]

If we don't have 100 shares of Tesla, is the plan to buy them first at the current price of $42,264 so we can cover the potential sell for $50,000 on Oct 23? What happens if we never had the 100 shares of Tesla when the option forces you to sell at $500?

[@MisterAlerion]

Never put up all of your stock. You probably shouldn't be doing it on Tesla if it outside of your risk tolerance or heavily exceeds your capital

[@chimbatete]

Hi quick question. If one is holding alot of shares of a company and wants to trim his/her holdings from time to time, would you say selling option calls would be a better way than just doing a sell limit order?

[@InvestwithHenry]

Yes exactly what I say I'm my course

[@bobbyserchion9752]

Oy. Tell. Me. If. I. Buy. A. Call. Option. For. $150. Dollars. An. Had. A. Strike. Price. Of. $155 dollars. Do. I. Hold.

[@27horses231]

Finally, a good explanation :-)

[@mikests9]

Great video man.

[@BrianDoolittleAustin]

Thanks man good video

[@evanandonyan3626]

Is it safe to sell call options without owning the stock your selling calls with? And should you be doing it? great video btw

[@InvestwithHenry]

No, that is not safe.

[@kevinagee5085]

@@InvestwithHenry what are the implications of selling calls without owning the stock? i'm new to this

[@lijsuk1000]

@@kevinagee5085 Selling a call without owning 100 shares of the underlying stock exposes you to UNLIMITED losses.

[@HDBnB1]

I had some options expire worthless on Friday end of day but they're still in my account now. They were put and call options that I sold but they're still showing up in my account. Do they automatically go away or do I have to close them manually?

[@tracykramer5372]

What happened with these, I'm curious.

[@lostfan5054]

What happens if no one buys your option? What happens if someone does buy it? What happens if the price goes way way up past the break even point? What if goes way way down?

[@retnodewati9060]

so if tesla hit $500, then your profit is $342 (the premium from selling the call option) + the price difference multiply by 100 shares?

[@stephennutt3058]

Can someone explain to me how to get out of the option spread on Robinhood? I figured out how to buy and I've double my very small account but don't want to loose it

[@sdanduri]

I have DATADOG stock which I bought last year around $140. Now it lost almost 50%. I am still trying to understand how can make money on covered calls. I am seeing a price $8.15 to sell a call with June 21, 2024 EXPIRATION date for $130. Consider if I sell 1 call this now. I am going to get a credit of $815 immediately. Now my question what happens if by June 21, 24 the price is only $100. I am going to loose all my stocks. someone please explain me ?

[@Forsakenzombi]

Wish the video or even the buying calls video would have mentioned stuff about buying or selling calls that are below the current market value. Like I’m so confused as to why I can buy a call option that is literally already at the break even price... can’t find any info on this

[@InvestwithHenry]

I'll make a video of buying out of the money options

[@abigailpatterson9432]

How did the trade turn out?

[@InvestwithHenry]

Profitable

[@cleattle]

Tks for the video.

[@claytonstell8252]

So if i bought 100 shares at $5 and made a sell call option to sell all 100 shares at $6 do i keep the premium and make the $1 profit on all 100 shares?

[@fishmut]

As i know there is a brokerage fee for the trade .

[@nova1k503]

Buy call options. You have to buy the shares. 100sharea. Times $50 Equal 5000. Can I sell the buy option I I don’t have to buy the 100 share for 5000

[@abrahamnavarro1287]

Can you do some option examples on TD Ameritrade?

[@InvestwithHenry]

Yep

[@alanchen2468]

how to buy back the call options is you have already collected the premium?

[@suukithesamoan2327]

You simply buy the exact call option for the new price. For example if you sold the option at 1.00, and bought it back at .90 you gain $10.