Should You Sell Covered Calls OR Cash-Secured Puts?

In this video we are talking about selling options, specifically selling cash-secured puts and selling covered calls. We are working through which of these option selling techniques makes the most sense AND which situations make the most sense depending on your goals. covered calls and cash secured puts are great ways to generate income from your investments.
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This communication/content is for informational purposes only and is not intended as personalized investment advice, tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. This communication should not be relied upon for purposes of transacting in securities or other investment vehicles.
#sellingoptions #coveredcalls #cashsecuredputs

[@AverageJoeInvestor]

What's Up everybody! Happy Friday! Make sure to leave your $0.02 in the comments and THANK YOU for being part of the community! =)

[@slammer6789]

When my relatives ask me to explain how options work, I've learned to just have them watch your videos. Much clearer than me!!

[@MaxGrey03]

One other reason not mentioned as to why you might prefer Covered Calls is that you will earn any dividends on that security while you hold them, similar to earning interest on the cash on hold for the Cash Secured Puts.

[@derricklaw1]

American options can be exercised at any point they are in the money. Doesn’t have to be the strike date, although it usually is. With as many options as you sell, I’m surprised you’ve never been assigned early 😊

[@AverageJoeInvestor]

Most often there is no benefit to the option holder to exercise early… UNLESS there is an ex--dividend date coming up. THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍

[@derricklaw1]

@@AverageJoeInvestor I’ve had it happen on occasion. I’ve actually just turned around and sold cash secured puts at the same strike/date and for some extra premium when it does 😉

[@MaxGrey03]

I have had them assigned early, but the options were deep in the money at the time that they were exercised.

[@AverageJoeInvestor]

@@MaxGrey03 it still doesn’t make sense for them to request assignment. Better to just sell the option for a profit.

[@MaxGrey03]

@@AverageJoeInvestor Maybe so, but I got assigned on twice last month (albeit, 1-2 days before expiration). I think that your earlier response was probably the reason as it may have been ex-dividend date, but I am not sure.

[@toby6180]

Good job on the video - very clear explanation of these strategies.. One other consideration is a difference in premiums of Calls vs Puts. Typically, Call premiums are higher than corresponding Put premiums. It may depend on overall Bullish vs Bearish sentiment. Here's a random example, from May 17, 2024: AMZN trading at $185. For ATM options (strike price of $185), June Call is $5.40 vs $4.70 for Put. For OTM options, June 190 Call is $3.15 vs June 180 Put at $2.70.

[@perry3770]

I prefer selling cash secured puts because for a certain investment im waiting for the price to go back down to buy 100 shares but that doesn’t seem likely to be happening, so I’m collecting the premium. If it does go down to my strike price then I’d be happy to buy the shares.

[@kentfaver1367]

Thanks Joe! I am doing both and am actually treating the selling puts part as a kicker to the already 4.95% I'm getting on my cash It's a no brainer to me. I also sell cc's. Great stuff!

[@jaypaladin-havesmartswilll5508]

Thanks, I needed more information on the cash-secured puts. I also wanted clarification at what point of the option period, the option will be executed if it meets or go beyond the strike price.

[@funnyperson4016]

The best approach to covered call in my view is to own stock and do covered calls only after it reaches or exceeds your price target. Then you don’t miss out on upside. The best approach to cash secured puts is a stock that is close to a price you were willing to pay.

[@janshuster1426]

Sell puts on stocks you don't own on low or no dividend stocks. On stocks you own or buy higher dividend stocks, sell covered calls.

[@AverageJoeInvestor]

Well stated. THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍

[@wesleypipelayer7627]

i thought that the call buyer can exercise his right to buy the stock, BEFORE expiration, NOT just AT expiration.???? and same with puts.

[@howardwylie1620]

They are both great tools when used properly.

[@kjaychen]

I sell covered call time by time, but every time I am scare to get excised because I don't want to sell my stock, but I still want to collect premium as interest, what Delta do you suggest, do you sell option by Delta, or just by random.

[@662801]

I would really appreciate it if you could make a video about how to find Dividend Stock. Thanks Much

[@Celticmedicineman]

How do you manage wash sales with these and the wheel strategies? Great video thank you

[@jameslucas5590]

Before I watch this video I will say this. BOTH ARE GREAT to do so you don't leave any money on the sidelines. However, I do like CSP right now because of the high interest rates on my account. If the market is in an uptrend or sideways channel then I'll do SCC. Otherwise I want to save my principle get a high interest and CSP.

[@jfeher4954]

Is CSP is a Cash Secured Put? Is SCC a Sold Cover Call?

[@ismith351]

Excellent video. It makes me more clear!!

[@BTBLive]

Please do a video on early assignments.

[@luckygreenforest508]

Great Video, thanks for sharing ❤❤❤❤❤

[@4427hall]

Another good video Joe, thanks. Eric

[@SebastianMuller-nu7dp]

I am new to your channel, only because of the YieldMax ETFs, which use the Poor Man's Covered Call. I wanted to know what that is and suddenly I am into Opstions Trading 😅. Do I understand that right - When I sell a Cash Secured Put, and I am expecting a rising market, then I would need no money to sell the Put Option (Obligation to buy at a falling market) and itnwill expire worthless if the Market rises without my money was ever on the table ?

[@MaxGrey03]

If you don't have the money to cover the Put, then that trade is considered a Naked Put. In a margin brokerage account, you are required to have some collateral when you sell the PUT. If you have the cash in your account to cover the Put, then you do not pay interest to cover that requirement.

[@howardwylie1620]

@@MaxGrey03 Well said.

[@johnpatterson9219]

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