Selling Covered Call Option Example on Charles Schwab

Check out my entire playlist on Trading Options here:
• How to Trade Options
💯 LET’S CONNECT 💯
📷 Instagram @JakeBroe 👉 / jakebroe
🐦 Twitter @Broe_Jake 👉 / broe_jake
You can also see my entire Brokerage Account Challenge Playlist here: • $25K Brokerage Challenge
👇 👇 Watch My Other Videos Here 👇 👇
★ How to Trade Options (The Basics)
• The Basics of Trading ...
★ How to Trade Options (Buying Put Options)
• Buying Put Options Exp...
★ How to Sell Covered Calls - Options Trading Explained
• How to Sell Covered Ca...
📷 📷 My KZbin Equipment 📷 📷
► My Camera 👉 amzn.to/2UZpFwA
► My Wide-Angle Lens 👉 amzn.to/2Qwf3Sq
► My Wireless Microphone 👉 amzn.to/2QBV9W0
► My Shotgun Microphone 👉 amzn.to/36bdLTv
► My Lighting 👉 amzn.to/2F5Ey7V
► My Light Diffusers 👉 amzn.to/2tjF8fG
================
📚 📚 Books That Changed My Life 📚 📚
📗 How to Win Friends & Influence People 👉 amzn.to/2F3ahGC
📕 Dumbing Us Down 👉 amzn.to/2spodrZ
📘 Quiet - The Power of Introverts 👉 amzn.to/36b2ti3
📙 The Red Queen 👉 amzn.to/2QzNW8W
📔 Rich Dad Poor Dad 👉 amzn.to/3bliFyP
📒 Why Nations Fail 👉 amzn.to/3fWZ3Em
================
What Is a Covered Call?
You are entitled to several rights as a stock or futures contract owner, including the right to sell the security at any time for the market price. Covered call writing sells this right to someone else in exchange for cash, meaning the buyer of the option gets the right to own your security on or before the expiration date at a predetermined price called the strike price.
A call option is a contract that gives the buyer the legal right (but not the obligation) to buy 100 shares of the underlying stock or one futures contract at the strike price any time on or before expiration. If the seller of the call option also owns the underlying security, the option is considered "covered" because he or she can deliver the instrument without purchasing it on the open market at possibly unfavorable pricing.
Profiting from Covered Calls
The buyer pays the seller of the call option a premium to obtain the right to buy shares or contracts at a predetermined future price. The premium is a cash fee paid on the day the option is sold and is the seller's money to keep, regardless of whether the option is exercised or not. A covered call is therefore most profitable if the stock moves up to the strike price, generating profit from the long stock position, while the call that was sold expires worthless, allowing the call writer to collect the entire premium from its sale.
Professional market players write covered calls to boost investment income, but individual investors can also benefit from this conservative but effective option strategy by taking the time to learn how it works and when to use it. In this regard, let's look at the covered call and examine ways it can lower portfolio risk and improve investment returns.
Advantages of Covered Calls
Selling covered call options can help offset downside risk or add to upside return, taking the cash premium in exchange for future upside beyond the strike price plus premium.during the contract period. In other words, if XYZ stock in the example closes above $59, the seller makes less money than if he or she simply held the stock. However, if the stock ends the six-month period below $59 per share, the seller makes more money or loses less money than if the options sale hadn't taken place.
================
#CharlesSchwab #TradingOptions #SellingPuts
================
DISCLAIMER:
This video is for entertainment purposes only. I am not in any way acting as an agent or representative of the Department of Defense or United States Federal Government when presenting this information. I am not a legal or financial expert or have any authority to give legal or financial advice. While all the information in this video is believed to be accurate at the time of its recording, realize this channel and its author makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in this video.
ADVERTISER DISCLOSURE:
Jake is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to www.amazon.com. Additionally, other referral links are included and this channel does receive compensation for sending traffic to partner sites. Shopping through our links is an easy way to support the channel and we appreciate and are super grateful for your support!

[@JakeBroe]

Give this video a LIKE to support my channel! Also check out my entire playlist on Trading Options here! kzbin.info/aero/PLscTZuOqKWIxSZzy4ObKWDznEsCot_1HU

[@joshuathompson5054]

Quick Question: I have 2 sold covered calls, one is positive and one is negative. One is near ITM and one is OTM still. I don't think my premium has been paid yet. Will my premium be paid in full on expiration?

[@lisadawley]

Thank you for this step-by-step tutorial and explanation. This was exactly what I needed to make my first covered call, very appreciated!

[@JakeBroe]

You are very welcome Lisa! Best of luck to you!

[@rafaelgonzalezv]

@@JakeBroe This is what I was looking for also. And ​ you speak english in a way that is easily understood by non-English speakers.

[@nicolasparra8000]

Hell yea I just sold my first call contract on a etf that I am holding and don’t mind the premium! Thanks a lot for the tutorial man!

[@matthewsherwin8741]

Hey Jake just reviewing this video to refresh myself with covered calls-very helpful indeed! Thanks!

[@edwardturner1282]

Excellent demo. Need to watch it again only because I'm new & nervous.

[@Highlyskeptical]

Thanks for the clear explanation of how selling covered calls work. I need to learn how to sell a covered put option because I think my Tesla stock will keep going up, as a trend.

[@JakeBroe]

You bet HS! Good luck with your TESLA stock!

[@nealzeigler3734]

You are a great teacher. Not only am I learning, but I’ve shared with friends and plan to use your series to teach my kids about swing trading. Thank you for what you do. I am going to support your Patreon right after posting this comment.

[@brendoncorrigan1842]

Maybe Im confused, but why would you not just write a covered call option on every position you hold at least 100 shares of? Just get free premiums, and if you are bullish on a stock, put the strike price higher. Then even if an option is exercised, you just buy another 100 shares of the underlying stock... Right? I am pretty new to options trading so Im guessing there is something fundamental Im missing here... lol

[@JakeBroe]

You are not missing anything. Lots of people do this on all the stock they hold. But... this requires knowledge of what options are and most people don't have the patience to bother to learn.

[@DrewAWB]

Great video, I've been thinking of starting getting into covered calls but was a little overwhelmed when trying to figure it out myself. I also love the Milwaukee flag in the background!

[@JakeBroe]

Thanks for watching Drew! Glad you like the video! Go Bucks!

[@crowdfundcrew]

This was exactly what I needed - I've been looking at writing (selling puts) options and covered calls - but schwab's terminology is a bit wonky to get started - their definitions of each term do not line up to what you see on the trade page. I subscribed as you have the schwab examples (and explain them REALLY well) - thank you. I have to check out your challenge to see how you did. Donate for a Dream

[@Steve83B]

Selling covered calls, even a bit out of the money if you have a long hold period, is a great way to make an extra bit of money.

[@JakeBroe]

I agree Steve! It's a great extra source of income and a hedge against a declining market in general.

[@scottmagnerod]

I’m working on one now on a single stock What do you consider a long expiration ? I’ve been maybe going a little overboard out over a year on one. I’m very interested in your answer

[@andreunz]

Thanks Jake. Very clear! I tried to understand the logic on Charles alone and called an advisor. None of them were really helpful, this is much clearer. I will look the other videos too

[@JakeBroe]

Awesome! Thanks for watching Andrea! Cheers!

[@deviambati3805]

Thank you Jake for the example shown in Schwab account. 1. I have Canadian bank stocks in my registered account, do you think usd stocks are better for covered calls? 2. Let us say the current market price is keep increasing, which shows the covered call loosing money, so we wait until expiry or exercised. Am I missing something? Thank you again for your detailed videos - I enjoy watching few of your videos every day - my learning curve is increased.

[@JakeBroe]

Hey Devi! 1) Options are traded more frequently on US stocks rather than Canadian stocks. Doesn't matter to performance, but matter for liquidity and option pricing. 2) If you are comfortable selling your stock at the agreed upon price for the contract, then you don't have to do anything and can just let the contract expire in the money.

[@madcat453]

Hi Jake, have you ever done a synthetic covered call on Charles Schwab? I'm interested in knowing how assignment of the short call shares is dealt with by the broker. Do you manually have to call in your long call shares to exit the trade, or is it automatic and you are just credited with the difference in cash?

[@chrisbrown8748]

This channel is super undervalued. If Jake sells out and just starts making stimulus check videos I would stop watching but he would probably gain like a million subs lol. Thanks Jake I love your content.

[@JakeBroe]

I appreciate that Chris! Ultimately... I am not doing this channel for subs and money. I definitely like and want money, lol. But I don't want to turn this in to a job I don't like just for MORE money. And if I started making stimulus check videos or "Next 10X Stock to Buy Now" videos then I would just hate myself, lol. I think I can do just fine without selling out.

[@That_Cyber_Dude]

JAKE!! KEEP UP THE GOOD WORK!!!

[@JakeBroe]

Thanks Frank! I've got some great videos coming this weekend. I think people are going to like what has been happening with my account. Cheers!

[@frankdzurenko8528]

Question? You sell the covered call but the stock in your example moves down to 19 and you need to sell the 100 shares to prevent more losses. Must you first close the option trade by BTC (Buy to close) the 23 call and then sell the shares. Thanks in advance for your advice.

[@kamranfattah3466]

Thank you Jake for the great videos! Would you please make a covered call option example video for Vanguard their layout is very different from Schwab's. Thank you.

[@JakeBroe]

Thanks Kamran! I will make that tutorial video at some point this year for sure! Cheers!

[@stuyg86]

very clearly explained, and very helpful; thank you.

[@deadleague3618]

Hey Jake do you have a video somewhere where you go over when to buy to close covered calls that you wrote and how to actually do it? Same could be said for Puts as well that you write? Like when to to buy to close those as well. Thanks as always. Take care.

[@JakeBroe]

Hey deadleague! Not a video specifically, but if you sell to open a put or a covered call, then you might want to "roll" them once you have already captured more than 50% of the value of the contract. You are right in that I need to create a video on this topic and will do so soon.

[@deadleague3618]

@@JakeBroe I have a couple covered calls that with an expiration date of 5/21 that went above 70% yesterday and I’ve been trying to figure out why and how to close. I feel like it will be better to close early and then write another when the market changes back.

[@patrickalexis6230]

This was so helpful. Thank you Jake.

[@JakeBroe]

You are very welcome Patrick! Cheers!

[@DailyMeditation365]

Thanks Jake! Just sold my first covered call on NIO

[@JakeBroe]

You are welcome Daily Meditation! Best of luck!

[@odoc41]

Thanks, great example!

[@JakeBroe]

You are very welcome DOC! Cheers!

[@urbanlouisvillechessclub4503]

Excellent video! I have a question or two. Where on the Charles Schwab site do I start doing this I.e. selling options? Also, what companies do you recommend a person buy to do this....Kroger, ETF's, McDonalds, etc.....?

[@villa50bis]

Thank you Jake, the stock market has become much more compelling since I started selling covered calls, the red market days suddenly became interesting too! One question - as you said, CC’s are a great way to gradually reduce the purchase price of the shares in your portfolio. Is there a way to make the Schwab platform (I use the app on a tablet) automatically subtract the call income from the relevant share costs, or do you track this separately on a spreadsheet?

[@Chris-fg3yd]

This was super helpful and timely - thanks!

[@JakeBroe]

You are welcome Chris! Cheers!

[@brianchanhere]

Hi Jake, may I please ask why selling a covered call is a "Sell to Open" instead of a "Sell to Close"? A covered call means you own the underlying stock (and must at some point previously bought them), so if you a looking to sell a covered call as an exit strategy (for example, the market price moves above the strike price, then your share is called away), then you no longer hold the stock and your position is closed. So shouldn't it be "sell to close"? Thanks.

Hi Jake, how to set the limit buy to close order when writing cover call in Charles Schwab

[@ACR4008]

I wanted to get your take on this strategy that I already use- keep up the challenges for 2022! I’ll be watching.

[@corplinem5542]

Jake - How do you do a covered call and short put on a beaten down stock you own with at least 1 contract so you can exit position and recoup your cost basis?

[@zunar_j5_933]

Really miss your trading videos!

[@aarontaing8795]

Great video. Can’t wait to try this

[@JakeBroe]

Awesome Aaron! Covered calls are kind of a win-win. Best of luck!

[@edwardturner1282]

Outstanding video. When a "newbie novice' like me understands this; quite an accomplishment. Thank you.

[@94CSPmiata]

Thanks for the info, I am sitting on a few things that don't make sense to sell but I can sell contracts for above my cost average and get some fund back. Exactly what I needed help with!

[@DDprzybyl]

Great video. My wife and I inherited a bunch of stock just as I'm getting ready to retire. Found this video. Selling covered calls will be a great retirement income stream. One suggestion though - you should say "sell the stock" not "lose the stock". "Lose the stock" sounds like you lost the stock for just the price of the covered call.

[@blueskies3263]

Agreed on the suggestion of saying "sell the stock" vs. "lose the stock". I had the same reaction, too, when you said one would "lose" the stock.

[@donovanbailey4398]

Great instruction! Thank you for sharing. If the stock is called away...does Schwab automatically sell your stock and transfer the funds to a buyer? OR, do you have to manually enter a sale for your stock? In other words, how does the stock and option transaction that is called away get done/completed?

[@JakeBroe]

Hey Donovan! You broker enforces the contract automatically for you.

[@gargigulos1984]

@@JakeBroe and then you get the money right for the shares? I mean I assume you do but I've never heard it explicitly said.

[@bischofb]

@@JakeBroe Great video, but would have also been great to show when the stock is called and how it affects your account. Just to show the full process from start to finish.

[@vladnesterenko7130]

Thank you Jake! As always, fantastic video!!

[@JakeBroe]

Thanks for watching Vlad! Cheers!

[@aurinator]

Would this work the same for 0DTE Options when available with like SPY?

[@cleohernandez9800]

how much was your premium on this option? ty for the video very helpfull

[@mtzmechengr5781]

WOW! I just checked the history chart for this stock and this covered call is perfect! The stock literally just went up a little for the call to be in the money and Jake got rid of his 100 shares. Then, the stock went down and it is now trading at 13.86 (May 27, 2024). How did you do that?

[@goflyers2851]

YOU DA MAN!! Love this video man so glad I found you

[@JakeBroe]

Thanks so much goflyers! Cheers!

[@matthewsherwin8741]

Excellent video, Jake! Thanks a lot! 👍

[@JakeBroe]

Thanks for watching Matthew! Cheers!

[@wle6393]

Hi I'm still learning options, and have a question: Let's say I have "sell stocks covered call.".. The option profit percentage goes down to negative, when the actual stock price goes up..... I would like to kNow, I will Not lose any money as long as I don't * buy* back the contract ???

[@garthmccarthy4572]

Great as usual Jake. Many thanks great video

[@JakeBroe]

Thanks Garth! Cheers!

[@sujit5013]

great video. what if you don't want to lose the stock. do you just buy to close?

[@dekeferrell7265]

So to be clear. I bought a stock trading at $14.00 on Wednesday. I can sell to open calls for say $14.50 for that Friday-- collect the premium and if the stock is above $14.50 by that date I lose my shares for $14.50 each + w.e. premium I made. If it doesn't rise above $14.50 I keep the premium and my shares?

[@SnowdenFu-jh6bx]

Hi Jake, I have question that what Margin & Options Access should I apply, I opened covered level but I cannot sell call options

[@Dasol0246]

Saw your video, best I’ve seen out there, however what was the outcome of the X-ray call option…. Did someone assign it, did it expire….. what happened. Thanks

[@nightelf7921]

One thing that I realize is, what happens if the stock goes down strong during these three weeks? you lose much more than just leaving today your position, right?

[@Hav0c1000]

If the holder exercises their right to purchase the shares, how do you select what lot of 100 shares to fork over? You didn’t show what happens at expiration.

[@justinmazza3872]

Do you have a simple excel tracker you use to keep track of everything on selling covered calls?

[@chimbatete]

Hi, what happens when the strike price is activated at $23 early like 5 days in? Will the option holder execute or cash in or can he/she wait til the price goes even higher as long as contract still has time? Also if buyer executes do you get a notice from Schwab that contract is executed and cash is on your account? Thanks!

[@JakeBroe]

Hey chimbatete! No, the contracts never get exercised early, because the contract has more value due to extrinsic value being included (time value and implied volatility). You lose that value if you exercise it early and just capture intrinsic value, which is the difference between the strike price and current share price. And yes, if a contract you sold is exercised, you will get a notification from your broker.

[@chimbatete]

@@JakeBroe Hi Jake, sorry but one more question. Ok strike price surpassed but buyer waits but then the stocks takes a dive. That option should be worthless to him correct? He changes his mind and stocks never gets called. What happens in this scenario? Will the contract just expires normally and it stays in my (sellers) account? Thanks!

[@benjaminhardin9735]

I just started trading this year and I this was a very good video to watch, and was very informative!

[@JakeBroe]

Thanks benjamin! Best of luck to you!

[@ug2493]

Hello Jake, thank you so much for your option videos, they certainly made it easy for me to learn about that subject. I am hoping you will someday continue with your finance videos. I have a question. A couple of days I got assigned with some short stocks and was wondering how to go about selling covered calls or put on those short stocks. Do I sell covered puts out of the money or how does it work? Thank you very much for your reply.

[@bhavikbhat]

Fantastic Details. Thank you so very much! Subscribed!!

[@cliff1127]

Thanks for the info. In case the stock does jump up, is there any protection I can add if I still would want to hold the stock long term? So for example, can I buy a Buy order that triggers right at the Strike price to ensure I'll still own the same amount of shares going forward?

[@GenghisKhan22]

Is there a way to sell it before the expiration date?

[@roburb73]

I looked when I saw this video and Xerox is now at $23.57. Hope for a dip so you can keep selling those calls. If you want a good covered call stock, pick up NIO. I've made $2300 in covered calls in the past 2 months selling 2 contracts.

[@JakeBroe]

Hey Rob! Those are some rich contracts! And yes, Xerox went up. I explain what happened in my video coming out Friday.

[@jameslucas5590]

If you sold 10 covered call contracts, does that mean one person wants to buy all ten contracts, or can ten different people each buy one contract from the ten you sold?

[@richieobrien2329]

How do we choose which shares to sell when the option is executed? for example I have 200 shares of a company trading at $100. I bought 100 at $75 and 100 at $100. how do I choose which 100 I sell for that option?

[@JakeBroe]

I think the default will be just the oldest shares in your account (First In First Out). Brokers do this to help clients triggers long term capital gains more often when shares are sold. But you can call your broker and specify if you want this done differently I am sure.

[@nicolasparra8000]

Does it always go of the current stock price or the cost basis that I have on the stock , For example my cost basis is 49 but the stock price is currently 55 just wondering if should place a covered call above 49 or 55

[@Serg_lemus]

This might be a dumb question but what if ur average price is really low and u want to sell a call option much lower since the premiums are much bigger can u still do that, ?

[@calebt53]

Thank you! Can you explain how to roll options on Schwab

[@Virgilgomez1-k2u]

Thanks!

[@stevenjsmithshrm-cpphr8418]

Do you have a video on doing this on the mobile version?

[@lexn865]

Thank you for your shares!

[@JakeBroe]

Thanks for watching! Cheers!

[@SuperFS11]

Thanks for the channel. I have so many loser stocks that I want to get rid now that this is a perfect solution. Still hard to understand but I just subscribed and will check your other videos. 👍

[@willreidy5851]

Thanks Jake, this was a very good video. On your last comment, you said you have to be totally comfortable with losing your stock. Do you just mean that you'll lose the stock if it hits the strike price and the option holder exercises the option?

[@canpeltek5094]

Great video, thank you for explaining, do you have a video that explains when to use each of the purchasing options as in. I understand what "sell to open" is, and you need a "buy to close" to close that, but what about "sell to close' and "buy to open" do you by any chance have a video explaining, or can you explain that too? That is a bit confusing.

[@deviambati3805]

Hi Can, when you buy a call ( long call), you select as BUY TO OPEN, when you close a long call, then you say SELL TO CLOSE. just opposite of selling a call (short call). May be Jack can explain more clearer. I am a beginner and trying to understand the logic.

[@andrewalkony2608]

Hello Jake, when you have time could you please make a video/review of the citi bank Costco visa credit card? I saw the 5x return on gas purchases and it seems a good deal but I would love for you to review it and analyze it please. Thank you i

[@JakeBroe]

Hey Andre! The Costco card is a great option if you are already a Costco member. I highly recommend!

[@joecoupon8299]

At 7:06 Just curious, but what are you doing with AT&T? Liked and Subscribed.

[@JakeBroe]

Awesome! Welcome to the channel Joe! I ended up selling to close the call just above my cost basis a month later. The stock prices didn't move much while I was holding it.

[@joecoupon8299]

@@JakeBroe Thanks for the update! I too noticed that there's not much upward movement to its stock price. However, I like it for its Dividend Aristocrat status. Perhaps is one of those "Diamond Hands" retirement stocks for when we make it to our golden years.

[@rammo8804]

not sure if this has been addressed but what fund should be invested in with leftover uninvested cash in a schwab brokerage account

[@AMowrey]

I have no idea what a call option is, but I'm still here to learn how to sell one.

[@JakeBroe]

Haha, you are learning Ashley! Maybe someday!

[@sampatp3598]

Hi @Jake, thanks for the great video, on the covered call option expire does Charles Schwab credit the initial market value to your account? Trying to understand when the call premium is fully paid to your account

[@Tony-kw8nu]

so the money that you would earn on covered call, would you get it right away? and can you spend it right away? thanks Jake

[@MrDwebe505]

Absolutely love your videos. What's your opinion on selling covered calls with a shorter expiration date than 30-60 days? Is it crazy to sell a covered call with 1-14 days to expry?

[@JakeBroe]

Thanks Andrew! You can do shorter periods, but it is just more to manage (checking it and reseting) and if the stock moves fast against you unexpectedly, then you don't have extra time for the stock to reverse or normalize. Just a higher chance of being exercised on I think.

[@MrDwebe505]

@@JakeBroe makes sense but like you had mentioned before, worst case scenario you’d just buy back the stock if it gets exercised, right? Also, I have not done the math but would it be beneficial (in your opinion) to repeatedly sell covered calls that are 1-14 day, deep OTM calls with a relatively cheap premium VS one that was 30-60 days until expiry and a higher premium?

[@phyothu5311]

how do i check the delta and theta when doing a covered call? I can't seem to find it during the option trading screen where you put your limit order. Thank you!

[@JakeBroe]

Hey Phyo! There is a drp down menu in the upper left of the option chains screen where you can switch from "calls & puts" to just show the "greeks".

[@phyothu5311]

@@JakeBroe thank you

[@courtnims2583]

Nice brotha!

[@ahmadalzari4431]

Let’s say on expiration the stock is actually called away and exercised, how much does Charles schwab charge for exercising ? How much does The Whole process cost in fees and commissions to sell a covered call?

[@JakeBroe]

Hey Ahmad! You pay $0.65 to the CBOE for facilitating the contract. I then paid $0.05 after the $2,300 worth of XRX stock was called away. That fee goes to the exchange. Schwab doesn't charge anything. So total for this call is $0.70.

[@ahmadalzari4431]

@@JakeBroe thanks jake , keep it up

[@selvakumar-uh6fk]

Can you please explain more about PAS service and Wealth management service in Fidelity platform?

[@JakeBroe]

Hey selva! I can look in to that for sure. Cheers!

[@renjixb1]

Any issues/tax implications if you sell a call option on a stock you really don't want to give up? Say sold a call next month w delta under 20% just to get extra money & it gets exercised in a month, any issues with taking the $ + premium and rebuying the same stock again right after it gets exercised?

[@garthmccarthy4572]

Hi Jake. Just checking, if I sell a call contract and a few days later I see its likely I will be assigned, I can "buy to close" that contract the day before expiration of I so choose? Also in the case the most I can loose is the premium I originally received? Thank you.

[@behrensf84]

If the call is on the money when it closes, are you “losing” the shares, or are just forced to sell at the agreed price? If it is a covered call where you own the shares, I would think you only lose the difference in value right? Like for example, if the cost is $1 dollar for a share that is valued at $100, and at closing the share goes up to $110, you have to sell for $100, and lose $10 minus the $1 you got paid. So you only lost $9 in opportunity cost...

[@JakeBroe]

Hey Felipe! I am going to lose the 100 shares and be paid $3,200 if Xerox's share price is over $32.00 by the expiration date.

[@matthewsolomon7925]

Why do you pay a comission?

[@musictorelaxyourears2429]

Hello I have an account with Charles schwab but I just i want to know if we can buy on those apps like amazon ebay or others like that using a card and how can I get the card could you let me please know

[@johnnyboyzZ]

They’re paying extra to buy a stock that you already wanted to sell. Sounds like a win to me.

[@JakeBroe]

Yep! I talk about it more in my next video. But covered calls are a win-win. Best option play most people can make.

[@BlackJesus8463]

That was a really good fill by Schwab Jake! You would not get that from Robinhood! (my bad)

[@JakeBroe]

I agree, that was a good fill!

[@bhaaaandari]

Hey Jake - great video! QQ - are you 'done' at this point or is there still action you have to take to 'finalize' the contract? If you wanted to get rid of XRX which was the case for you and Schwab filled the contract, as the seller is this considered done? Or, does something automatically happen on the expiration date? I'm a bit confused on what happens next...

[@JakeBroe]

Hey Atul! I can close out the contract at anytime by buying back the contract. I would do a "buy to close" order with the same expiration date and strike price on XRX and that cancels out my existing call. If I sell my stock and still have the contract at expiration, then after the market closes on Friday, Schwab will force me to do a market order to buy the stock and then I lose it when the contract is exercised and I'll be paid the strike price for the stock. The brokers handle and enforce all of this automatically. In general, it is always a good idea to "sell to close" or "buy to close" contracts before the last day so you can take your profit and avoid this confusion.

[@Jorge-ig7ku]

Hi Jake, can you make a video about wash sale, please.

[@JakeBroe]

Hey Jorge! I talk about the wash sale rule in this video! kzbin.info/www/bejne/nn7TZI15jpV2o8k

[@Jorge-ig7ku]

@@JakeBroe Thank you !!!

[@niteshbhedi453]

Hello Sir, In my Schwab account. There 4 Level of Trading option, I only have trading approval for option 0 how can I to the next levels or any help up tips on it ?

[@JakeBroe]

If you do a couple trades, then they might approve you for level 1 which is really all you need.

[@niteshbhedi453]

Thank you

[@theanimeaccountant1472]

I have a question for those who sell covered calls. I sold a put that has a high chance of being exercised. I am ok with that because im just going to sell a covered call at the stike price i had to buy it at, breaking even and just collecting another premium. I noticed that the further out you put the expiration date the more premium you get. Is there a downside to putting an expiration date six months in advance eventhough im going to sell it at the current price of the stock?

[@JakeBroe]

Hey Tamarcus! The downside of a farther out expiration date is that you can sell fewer calls/puts over that time. You can probably get more premium selling six 30 days contracts than just a sing 6 month contract. It's all about how much time and effort you want to put in to your investing.

[@tedarthur9233]

If we sign up for one of these online brokerages, are we allowed to have an index fund AND buy and sell stocks at the same time? On the same account?

[@JakeBroe]

You sure are Ted! You can do/buy/sell whatever you like within the account.

[@tedarthur9233]

@@JakeBroe thank you

[@joknd]

Do you know if is possible to do a poor man’s covered call with options level 2 in schwab?

[@JakeBroe]

A PMCC is just a vertical spread, so yes, you should be able to at Level 2.

[@maxmaxed2887]

Sweet :)

[@andie_pl]

Is it better to close out your contract or just let it expire to collect premium

[@JakeBroe]

Generally, it is always SAFER to close out your contracts before expiration. Especially "bought" contracts. But in this instance with a covered call... I'm just going to let my broker take my shares from me to enforce the contract. I explain it a little more detail in my video coming out Friday.

[@sal7777777]

So, what happened, did you achieve your goal of doubling it?

[@jerrylawler2735]

Look at dates, 38 got pack man. Needs to live with mommy a little longer. No water front properties.

[@abnerjosue4651]

First of comments!

[@JakeBroe]

You got it Abner! Cheers!

[@ThinkMoneyBenny]

a strategy so simple, but hard to explain lol ..the irony

[@JakeBroe]

I don't think this will be the last covered call i sell for this challenge. So I'll get another shot to explain it!

[@ThinkMoneyBenny]

@@JakeBroe you’re good man, i mean just in general, when i try to explain it to someone in the easiest way possible, they still don’t get it, then i have to slow it down even more.

[@sammeme7452]

Thanks!