What To Do If The Market Crashes? Wheel Strategy Risks

Do You Know What To Do If The Market Crashes and You're Stuck in Stocks? Find out today!
New to our channel? Welcome! go.rockwelltrading.com/StartHere
Read about these Wheel Strategy Risks in our article of the week! www.rockwelltrading.com/artic...
Intro: 0:00
What is The Wheel Strategy: 0:34
Scenario One: 1:21
Scenario Two: 6:01
Scenario Three: 12:25
Stock Selection Is KEY: 17:06
How to choose the right stocks to wheel: • How To Find The Best S...
To get the transcript and MP3, go to: www.rockwelltrading.com/coffe...
The Wheel Strategy explained in 15 minutes: www.rockwelltrading.com/coffe...
Learn more about our Trading software, the Power X Optimizer: bit.ly/PXOToday
Recommended Links & Videos:
The "Wheel" Strategy Explained: bit.ly/3ePN4qT
How To Fly Rescue Missions: www.youtube.com/watch?v=OlTD9...
Wheel Book: www.rockwelltrading.com/the-w...
Trading with Margin: www.youtube.com/watch?v=UHy84...
My Trading Routine: go.rockwelltrading.com/my-tra...
#stockmarket #thewheelstrategy #marketcrash

[@rockwelltradingservices]

So as you can see, while trading the Wheel Strategy can be very lucrative, there are also risks. I hope this video helped you better understand these risks so you can trade The Wheel accodingly. If you have any questions, ask them in the comments below. Recommended Links & Videos: How To Fly Rescue Missions: kzbin.info/www/bejne/pWiTmX1raLGterM Wheel book: www.rockwelltrading.com/wheelbook Wheel Strategy Playlist: kzbin.info/aero/PLBa3sAx-Io2nosgosERUhIZwzvIgD-3Vq PowerX Strategy Playlist: kzbin.info/aero/PLBa3sAx-Io2l9ZV4s66J-uNkG6AJvhSPB

[@samherb1]

I like that he shows his losers and is honest about what happened. Most "guru" types on youtube (or anywhere for that matter) wouldn't do this.

[@rockwelltradingservices]

Thank you for such kind feedback! ;)

[@samwalker3441]

Thanks for the honesty, Markus. Not an easy video to make. Very few of the folks on the internet have your kind of transparency. I learn more from when things go wrong than when they go right.

[@rockwelltradingservices]

Thank you for watching! :)

[@ledfootdude]

Thanks for having the integrity to show the losses that we ALL have faced from time to time. So many people only show their successes because their egos won't allow them to look bad. Your honesty has made me a subscriber :)

[@rockwelltradingservices]

Thank you! ;)

[@user-nq2bm1sg5m]

I appreciate your honesty. You gained a follower.

[@rockwelltradingservices]

Thank you. 😊

[@TeFLoNMD11]

This video didn't age well. RIDE fundamentals didn't work out. ugh. Appreciate your transparency. It's happened to all of us.

[@deeptoot1453]

Yupp.. trading will only get you so far. Fundamentals come first always. Berkshire obviously trades as well but Fundamentals first.

[@travis1754]

Thank you for the video! It is nice to see some of the risks talked about thoroughly as opposed to just always focusing on the upside. Going to be looking into more of your content now!

[@rockwelltradingservices]

Awesome! Thank you for watching! :)

[@yumekura3462]

Many thanks for sharing! Do you sell covered calls with strikes below the strikes that you were being assigned? Appreciate your reasons for your answer too. Thanks again!

[@adamm5717]

Amazing content! This is pure gold.

[@rockwelltradingservices]

Awesome! Thank you for watching! :)

[@netten47]

I just found this video and I'm impressed on your transparency and honesty ! Bravo !

[@rockwelltradingservices]

Thank you, Greg. ☺️

[@brendanquinn6894]

Thank you so much Marcus for all your help. You are a legend mate.

[@rockwelltradingservices]

You are welcome!

[@Merdock-yp2xj]

Really appreciate the transparency Markus, everyone wants to sell you the perfect strategy and only go over the positives but you go over real risks and examples that’s why I keep coming back to your content, cheers!

[@rockwelltradingservices]

Awesome! Thank you for watching! :)

[@MrUnderwurlde]

If my put goes deep in the money before expiration, I roll the put rather than get assigned. There's usually much better net premium in the roll than the equivalent call. Additionally, while the put still ties up resources, there's no margin interest incurred. I've been rolling a couple of puts for several months and have collected sufficient premium to close the put and still make a profit, but as long as I'm making premium I'll continue to roll.

[@olarius650]

Another advantage is that rolling(and collecting credit) also brings down your breakeven price further.

[@michaell3134]

@@olarius650 very important to track adjusted cost basis

[@g_b]

Great video. Thank you for the honesty.

[@rockwelltradingservices]

You are welcome! ;)

[@azycray4801]

I really enjoyed this video Marcus, I will be watching more.

[@rockwelltradingservices]

Awesome! I am glad that you like this.

[@viihuman4416]

You can still sell options even when it crashes. i like to sell calls wednesdays 4-5$ above price, if its risky i wait for thursdays and sell 3$ above price. Weekly calls. i have 500 wynn stocks, its getting me 300-600$ a month just holding it.

[@gaetanguimond1911]

5 stars on your video. Clear, slow past, no need to rewind, worth it. Thank you, I just subscribed

[@rockwelltradingservices]

Thank you for watching! :)

[@damarismandie4971]

Great words towards the end, good to be reminded of what’s important sometimes.

[@fayasali9320]

Banks are scared of actually having to work in an ecosystem with real competition. All I know is this gon go much much higher real soon Awesome post

[@rockwelltradingservices]

Thank you! 😊

[@debbiesmith150]

Hi Markus thanks for this great video and transparency. It's been 2 years since this post and RIDE has continued to decline. What did you end up doing with RIDE?

[@thedudeandstuff169]

I appreciate your concise explanation on the wheel strategy!

[@rockwelltradingservices]

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

[@yohanlavoi4813]

Thank you for your honesty

[@rockwelltradingservices]

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

[@IterumLife991]

Excellent explanation on how to manage the Wheel. Very realistic. Thank you!

[@rockwelltradingservices]

Thank you for watching!

[@meworlds8216]

Amazing video! Very brave and honest to make it. And best video i watched in wheels strategy. Because on paper everything looks easy. This is a terrible event and i respect you for owning it!

[@rockwelltradingservices]

Thank you!

[@olarius650]

Another excellent video stressing on the importance of a trading plan.

[@rockwelltradingservices]

Awesome! Thank you for watching! :)

[@juanpayano8957]

Good morning very good explanation thank you Markus

[@rockwelltradingservices]

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

[@danilocastro1793]

Thanks from Brazil !!

[@rockwelltradingservices]

You are welcome! ;)

[@metagaminguniversemgu2240]

Just starting selling covered calls and cash secured puts. These are great strategies to work your portfolio when a stock falls. Very useful information.

[@rockwelltradingservices]

I am glad that this helps.

[@stevekill2223]

Very good content. I just don’t know where you find “value stocks” possibly with dividends for options that pay you at least 30% annualized. They seem to have much lower IV and those no where near 30 annualized….and if I recall you like weekly options. Thanks

[@rockwelltradingservices]

That is why I use tools to remove the guesswork. I find the stocks through PowerX Optimizer.

[@pokeking9272]

Markus thank you for sharing this.Why you not close the Position by 200% los of the Premium (ride).Greatings Form Germany

[@tangk7698]

Hi Markus,can you elaborate further regarding the 30% annualized premium?

[@BJJJUDO]

It’s about 1 year later and LVS is back up to $56. Not sure if he stuck with the plan but if he did he made out nicely in premiums along the way.

[@vikasgupta1828]

Thanks

[@rockwelltradingservices]

You are welcome! I had a webinar just a while ago, would you like to watch it? Reach out to [e-mail] and look for Cristy.

[@masoudmokhtari8997]

Thanks Markus

[@rockwelltradingservices]

You are welcome! ;)

[@richardsims9686]

Very helpful!! And it works!

[@rockwelltradingservices]

Awesome! By the way, are you using PowerX Optimizer?

[@richardsims9686]

@@rockwelltradingservices

[@richardsims9686]

I am not using PowerX Optimizer. I understand it is quite expensive.

[@rockwelltradingservices]

If you're keen on acquiring the PowerX Optimizer, you can access it at this link: bit.ly/441OPel. By utilizing the promo code "Rockwellspecial," you'll secure a generous $1000 discount. For further information, please don't hesitate to contact us at [e-mail].

[@jeffcherny2719]

Nice Job showing the bad with the good .. yes a 100 k loss is tough pill . I also sold credit spreads to help to DCA

[@rockwelltradingservices]

Thank you for watching! ;)

[@MrUnderwurlde]

I struggle to understand the ultimate benefits of dollar cost averaging. Nothing will change the fact that you've paid more for a stock than its worth. To me it seems that rescue missions are just a vanity project to try and make your portfolio prettier but the risk is that you're throwing good money after bad. Success can only be really be measured at the macro level of the whole portfolio. I get the point that you believe that there is still value in the company but sometimes emotions get in the way of making the right decision.

[@michaell3134]

I think the point of the video is transparency and not DCA... He clearly admits making a mistake by "breaking the rule" and not selecting a value stock. DCA is a good strategy for blue chips like apple, etc.

[@Sam-z1f]

Just checked the RIDE stock price and currently sits at 2.20. How did you handle this trade in the end? Thanks

[@petkuscinta9797]

Interesting to see how Markus risk management and exit strategy differs from say someone like Alan who is always (without exception) closing previous option and re-entering it lower when stock drops to level of breaking even (-3% approx.) I have to check it but I think Markus risk/exit strategy makes more money unless there is looooong term huge drop of stock (big losses). Alan's exit strategy makes less if stock tanks but avoids ending up with stock loosing big. Like this video a lot.

[@rockwelltradingservices]

Awesome. Thank you!

[@MrZorro132]

I am a beginner, if a stock price dropped 30%, how about i sell deep in the money call? What are the effects?

[@maxg9680]

Excellent and direct to the point. Glad you did not teach your students to roll your put options down and out, which only increases the risk of an even greater loss, while at the same time realizing your losses on your previous failed puts - which is what many "teachers" of rolling puts use to instill false confidence in their students.

[@rockwelltradingservices]

Thank you! I am glad that my teaching helps. ;)

[@petkuscinta9797]

Great example of explaining complex in simple way! I can see Markus trades many stocks (diversity). If he has the rule of adding 1/3 three times when doing DCA that means there is always cash in account allocated for it that is not working (making/loosing money). This is something many traders/investors do not realise when calculating annual % profits. For example if total account value is $100k and the strategy is to aim for 30% annual profits it is never 30% of $100k but 30% of working capital (that made net profit). If you allocate 2/3 for DCA then you would make 30% of 33k not 30% of 100k if 2/3 are never deployed because it is allocated for DCA risk management. Roughly said. Unless he is using margin for DCA. Comments welcomed.

[@rockwelltradingservices]

Thank you for watching!

[@sergiylytvynyuk5383]

Cool video

[@rockwelltradingservices]

Thank you! ;)

[@thezyg6311]

Once you are down by a certain amount, you have to start thinking the company might fall apart. Why not, at this point think about selling covered calls for the entire position at a loss reducing price while using the premium to buy long dated puts in case it starts moving to zero? Ride declared bankruptcy since this video, could have made some money back on the way down.

[@ampiciline]

Sir , I was looking at two most recent black swan events ( 2008 and 2020 ) and I found out Gold ( GLD ETF ) had the Lowest drop ( 32 % in 2008 ) and ( ( 15% ) ( 2020 ) BUT , the fastest recovery after the event , I mean its recovery has been super -fast compare to ALL other stocks and ETF ( spy ) .... My goal is mainly to preserve my asset and annualized return of ONLY 8% by selling (ITM) call and OTM Put ....Do you think GLD wheel strategy can do that for me ? ( knowing gold is in its super cycle and its VERY bullish till 2028 ) .... I am planning for only one contract or 100 share of GLD ...... I would like your thoughts on GLD wheel strategy ! is it risky ???

[@hackclassics163]

your percentage calculations are wrong. U did not factor in the premium you collected when you sold the puts.If factored in , the percentages losses shoud be less.... That s great to sell covered calls...correct me if i am wrong. thanks very kindly

[@markkeller9378]

Good video. What if you just trade ETF’s? You get diversity, almost no chance of -40 or -80 in 27 days. You can hold the ETF forever, as the indexes (SPY) will always be around and will always move back up? Does that lesson the risk tremendously? Thanks.

[@rockwelltradingservices]

Hi Mark, great question. The "problem" with ETFs is that they have low implied volatility because they are diversified. That's why you don't get a lot of premium, unless you sell a strike very close to the current price. And some ETFs are cash-settled, so you can't get assigned. That's why I prefer trading value stocks.

[@dimakomarov4422]

Hi Markus! I didn't catch the plan what to do if market crashes. Did you cut the video?

[@rockwelltradingservices]

Hi Dima, this is the shorter version of one of my Live Coffee With Markus.

[@carloscamchang9497]

Good good good video Mrs Markus, lear from the best trader.

[@rockwelltradingservices]

Awesome! Thank you for watching! :)

[@beverleydavies3045]

Hi Markus, In your Intro, you said the video would cover what to do if the entire market crashes and you are stuck in five stock positions. Not sure your video specifically addressed this scenario - other than perhaps SOH - Sit On Hands - for the duration of market crash. Please advise.

[@insider235]

yea he said that in the intro lol but his video (which is not new) turned out to be not "what to do" but "what could happen" and that you will have to create your own plan. Basically, if the entire market crashes and you are stuck in 5 positions then this video's message would be that "you could possibly lose a lot of money, blow up an account and be down over 40% of your initial equity on just 1 of your positions which will now need to be seen as a short term idea which turned into a long term investment that you are stuck in unless you decide to take the large loss and walk away." So basically, get ready to hold forever or take a large loss... - not a solution as much as a description of the hard reality/truth of investing.

[@Puffintrading]

Also wanting to find a clear answer on this Beverley

[@rockwelltradingservices]

Hi Beverly, yes, I was planning to include it in the wrap up and then forgot! So here's the answer: It depends how much the market (and stocks) are crashing. 1.) As you can see from the examples, if the markets corrects (10% drawdown), not much will happen. You might be in a position for a few weeks but then you should be fine. 2.) If the market turns into a bear markets (down 20% or more from the previous highs), then you are in a "LVS Situation" and might lose 8% per position IF you chose to close it at a loss. Or you have to wait a few months until it comes back. I have been in LVS since May, i.e. 5 months. 3.) If things get really nasty and the market and stocks crash 80%, i.e. a "RIDE Situation", then we have much bigger problems than losing money on your account. Can you imagine what would happen if the market crashed 80%??? I honestly don't think that THIS is a possible scenario. Does this help?

[@beverleydavies3045]

@@rockwelltradingservices Thanks, Markus for your detailed reply. Yes, I understand your strategy, which I'll probably adopt as mine too.!!

[@coocoocachooglin]

2 years later and I’m just seeing this and it’s timely in that I was assigned TSLA at 225, and it’s down to 187 now ~ 17% down, but there is hardly any bid at 225 now. So, I guess I need to get ready to start a rescue mission, but chatter is TSLA is going much lower, so it will be tough since there wont be any dividends either. I thought it would be an ok stock to hold because of the AI and Robotics plays and other things even though EV sales are struggling. I guess I’ll just see if I can earn some CSP premiums on it, just not liking the idea of getting assigned again. Thanks Markus, love your videos!

[@rockwelltradingservices]

All the best to you!

[@sonny5982]

Interesting thank you for this I needed this I’m currently on MARA but I feel the stock can tank at any moment . It’s not a great stock to own but I feel it’s backed by the crypto community

[@rockwelltradingservices]

You are welcome! Thank you for watching!

[@unclegood]

A very confident trader to keep his account and activities open for all to see, respect to that. If Ride keeps under-performing, it will hurt his credibility as the overall profits will be severely slashed at the end of the campaign and students will wonder if it is still realistic for them to make 30% a year.

[@rockwelltradingservices]

Well, as I keep saying: THIS is how I trade. I'm sharing what I do, and I'm sharing my mistakes with you (RIDE). Of course, you can choose how YOU trade, and I hope that sharing my mistakes helps you - and others - to avoid them. Making sense?

[@nwengr11]

Love your work ! Any reason u thought RIDE was a better stock than Tesla or Lucid or Nio or Bydd etc?

[@nwengr11]

Actually I remember u saying it was impulsive buying while u were on a holiday . Hope u can break even on this stock and put it behind u with a good learning !

[@rockwelltradingservices]

Nope. Selling puts on RIDE was a mistake, and I have admitted it many times. Lucid or Rivian might have been much better choices.

[@davidporter2670]

Man RIDE wiped out your whole year. I love the wheel plan as it has been the most reliable plan for me . However you still need to have a stop loss in ones plan. You might get lucky and get out of it but you have to factor this in your Year to date P or L.... I think your position sizing is too large for your account size. Just a Wild ass guess. Hope it all works out in the end !

[@rockwelltradingservices]

We'll see. Even if I would liquidate right now, I would still be up a little over $40,000. Let's see what happens until the end of the year 👍

[@davidporter2670]

@@subsonicflighttraining Yes RIDE was a huge mistake . I cut my loss at a 20% long ago. He said he was going to cut his at 50% like you said and he never did. It is now a 85% loss with very little chance of recovering if ever. He let it go down to the point of no return and now it is such a huge loss he would be lucky if 2021 return was even 10-20% while promoting to new folks the wheel can make 30-60 percent. I have made consistently 10-20% each year I have been applying the wheel myself. I have a different plan than Marcus and I do occasionally cut my losses. The key on the wheel is to only use strong underlying securities that you would be willing to own.

[@JJ-nm8sh]

Ouch, watching this 2 years on.. RIDEQ. $1.72 as of this post. What did you end up doing? Still a LT stock? Enjoying the content btw.

[@tgou007]

Why not still sell calls even if you aren't getting 30% annualized, it doesn't use up more buying power does it? as they are covered calls?

[@rockwelltradingservices]

You are correct that selling covered calls does not typically use up additional buying power beyond what is required for holding the underlying stock position. However, the decision to sell calls even if you aren't achieving a 30% annualized return depends on your individual trading goals and risk tolerance. While selling covered calls can generate income, it is important to consider the potential risks and rewards. If the premium received from selling the calls is below your desired target or does not align with your expected return, you may choose to wait for more favorable opportunities or explore alternative strategies. Selling covered calls without achieving the desired annualized return may still provide some income, but it's essential to evaluate whether the potential income justifies the risks and aligns with your overall trading objectives. Each trader may have different criteria and preferences when it comes to selecting options strategies. Ultimately, it is recommended to thoroughly understand the potential risks and rewards associated with selling covered calls and make informed decisions based on your individual circumstances and trading plan.

[@MitchMitsch]

Hi Markus. I'm curious why you didn't buy to close your contract before being assigned the shares? You may have had to pay a higher premium, but just sell to open another put at a lower strike price further distance out to make a profit. Wash and repeat while riding the stock price down at least for some of your position; which was quite large for your account. .

[@rockwelltradingservices]

Easy answer: Because my plan says "get assigned and sell calls." I understand that there are other trading strategies and traders who like to roll puts to avoid assignment. I actually WANT to get assigned. Different plan :-) Does this help?

[@norbertcsibi7720]

So basically on your 2nd way where you were -40% down, if it dips, you are keep making DCA where you reach to a point where it comes back up and you are on a profit, isn`t? Or I understood wrong here?

[@rockwelltradingservices]

Hi Norman, yes, that is the idea. You got it.

[@radergredfred2443]

Man, I trade 25 years and I hope you will think about what I tell you. 1. Every time I cut my loss early and I do not wait and hope the stocks will back this level again. Many stocks never back this level again. Take a look GOTU stock from $149 down to $2. I don't think GOTO will back $149. 2. RIDE fundamental looks bad, OPERATING INCOME OR LOSS -124M revenue 1,6M. 3. I never use margin if you have a loss RIDE $112,000 and then two other stocks for $100,000, your broker will sell your positions and you'll take a loss. 4 I never keep a lot of opened positions, you have a lot. If the market will go down -20-40% and this will be catastrophic for your account.

[@unclegood]

Interesting comment. I think Markus has been trading the same strategies for decades, and should have experienced the major housing and covid crisises. So what he is teaching should be able to withstand market crashes of 50%.

[@williamklein6749]

The only way there isn't always another trade is if you have no capital left. THE most important concept to trading is keeping your capital.

[@rockwelltradingservices]

Thanks for all your feedback. In every video I say: THIS is how I trade. I'm sharing what I do, and I'm sharing my mistakes with you (RIDE). Of course, you can choose how YOU trade, and I hope that sharing my mistakes helps you - and others - to avoid them. Making sense?

[@unclegood]

@@subsonicflighttraining wrong too, I don't follow exactly. I do not purchase the software or learning materials too, but appreciate the fact that he post these contents for free, and I learnt a lot from them.

[@norbertcsibi7720]

Can we do this on Crypto? As I`ve seen we have in crypto options as well. The same principles can apply? And also, can we trade options with like 1k until we get used to the whole process?

[@rockwelltradingservices]

Cryptos have options? Where did you see that? I haven’t seen any options on cryptos yet.

[@adas19581024]

Thats the reason i stick to index etfs.

[@rockwelltradingservices]

Thank you for watching! ;)

[@gtmav]

My plan is to access the fundamentals when the stock drops 15%. If the fundamentals change for the worst, stock is not earning and no future growth I will gladly cut my loss.

[@andywuzc1]

Why not sell more put and get your avg lower and hope for a dead cat bound to do a quick swing trade?

[@rockwelltradingservices]

Yep! That's what I do with the "rescue missions" 👍

[@MrKevSmiff]

Did he ever recover from this loss? The stock is now trading even lower around $1.6 😮

[@nishalnandwani]

October wheel income update coming, Markus?

[@rockwelltradingservices]

Yes. today, Monday 8th 👍

[@omarghosn8655]

Most people just starting out are not trading 60+ contracts...that would mean in this LVS "rescue mission" case that they have $3,000,000+ to play with. How can you apply the "rescue mission" if you have only 1 contract?

[@rockwelltradingservices]

If you only trade 1 contract, you can't do a rescue mission. You need to trade at least 3 contracts to do this. The good news: When you only trade 1 contract, you're not losing much money, so I don't think you need to fly a rescue mission. You could just hold the stock or cut it lose. Making sense?

[@omarghosn8655]

@@rockwelltradingservices Thanks, yes that does make sense

[@fredericdick5527]

My plan is very simple ,i'm allocate only 10 % of my portfolio for my wheel options strategy . If the stock go down 10 % ,I'm allocate 10 % of my portfolio.If go down 20% ,allocate 10 % portfolio ,etc. Until the end of the crash.Of course ,my yied wil be divided by ten ,unfortnately !!! P.S dividend can produce a little bit money

[@rockwelltradingservices]

That works!

[@omarkhan584]

I see your PL YTD is $12k only, could you explain how this was possible ? You have other positions are at lost currently probably then ?

[@rockwelltradingservices]

It's actually $101,255.

[@omarkhan584]

@@rockwelltradingservices Can you explain this then ? pasteboard.co/HQJMyl1vAFrF.png It shows $12k combined with realized and unrealized lost. I really appreciate your transparency, you are so great to show us everything

[@omarkhan584]

This screen is from 10:01 from above video

[@SD-mg7np]

id buy only long term stocks good quality ones

[@rockwelltradingservices]

I also have those on top of options trade. I use 3 strategies depending on the market climate. I have the PowerX Strategy and WTF for stocks trading and options The Wheel Options Trading Strategy. That way I am earning no matter what market we are in.

[@samialkhammash1985]

You can not make 30% annualized consistently unless you are ok with blowing up your portfolio sometime in the future, if not the very next day.

[@rockwelltradingservices]

Thank you for sharing your thoughts here

[@piercarloscalamandre5204]

But is this the same video of some weeks/months ago?

[@Merdock-yp2xj]

No it’s not, I watched that video. This is a new update, RIDE has dropped more since that last video. That last video I believe he was at $90k unrealized loss and it’s greater now

[@userOOO1]

Why would you be so intent on having your call strikes be at or above your cost basis? First, let's put aside the fact that a hype/darling stock is inappropriate for the wheel. Your loss would have been mitigated had you written the calls all the way down. If you (or me or anyone) were able to predict short term moves with any accuracy, you never would have written the puts in the first place. (So what makes you think that "sitting on your hands" is a prediction in which you should have any confidence?)

[@travis1754]

I am interested as well. Any chance you could give us an answer on this @rockwelltradingservices

[@cawag98]

@userOO1 It's natural to want to arrange assignments that would close the underlying at or above where you opened the position. I do it too. That works for going-concern stocks... companies that aren't heading to bankruptcy. Like he said, stock selection is important - an understatement on DRIVE. Yes, you can sometimes do well when you're underwater on an underlying by selling covered calls with strikes that don't get assigned but are less than what you opened the position with. Me, I'd be the unlucky guy who closes the position, though, just to see the going concern company's stock shoot up later...unlike DRIVE.

[@stevecrowthers7628]

This is why I got away from trading individal stocks and started trading index funds, such as, TNA, TQQQ, UPRO, GUSH, FXI, SOXL UNG ect. This way I'm not exposed to the drastic swings of one stock, especially during earnings season. I have a range I stay in with each one of these. I write my contracts out 30 to 40 days, with several coming due each week. I have had no losses doing this.

[@philipple59988]

Would you fly rescue missions until it hits $0 ?

[@jacques0131]

When things go wrong you become long term investor , if you choose dividend stocks you will get another protection

[@rockwelltradingservices]

Thank you for sharing your thoughts here. :)

[@Mr9taileddemonhunk2]

To fly a rescue mission you buy puts in 1/3s. What if you originally sold an odd number amount of contracts?

[@rockwelltradingservices]

Let's say you sold 5. Then I would do 2 / 2 / 1. Or if you sold 8, I would do 3 / 3 / 1. Does this help?

[@Merek.]

"Stock selection is key".. Proceeds to buy RIDE, then DCA down. (It's at $0.40 headed to zero). I really like all his other materials, but IMO if you stock drops 50% - cut your loss and move on.

[@InvestorAcademyPodca]

There lies the problem from what I can see, you can have puts on stocks that yield 60% annual or puts on stocks you want to own, but not both. I looked up a few today and the yield was in the 3% range, less than a savings account or CD.

[@ngchongsin2009]

You keep saying how and what do, maybe can just give the answer. This will save a lot of time, :-)

[@rockwelltradingservices]

Thanks for the tips. ;)

[@caleb8239]

👍

[@rockwelltradingservices]

Thank you for watching! :)

[@Niy436]

Hi mr Markus, I’m a house wife with no knowledge of any kind of trading, who can I trust with a small investment,

[@Sifatullahsolo]

😍😍😍😍😍😍😍

[@rockwelltradingservices]

Thank you! ;)

[@Cdix]

Why not choose blue chip stocks only that don’t have that level of risk?

[@rockwelltradingservices]

We have different risk tolerance. ;)

[@Cdix]

@@rockwelltradingservices so the premium payments would be larger is what your saying since it is a riskier position?

[@rockwelltradingservices]

Yes. The bigger the risk the bigger the rewards. But I take calculated risks and I just follow my plan. I also backed it up with recommendations from my software.

[@Cdix]

@@rockwelltradingservices you are a great teacher, the rescue mission concept is so memorable😂

[@rockwelltradingservices]

Thank you! :)

[@user-dl1nr7ll5h]

You haven't answered what to do if the entire market crashes and you are stuck with 5 stocks that you can't sell Calls on.

[@radekwe8681]

You have to look at your overall delta and try to go neutral. Easiest way selling some futures and if can’t do futures you can use options but they are not as good

[@TamerRashdan]

You are playing the long game

[@rockwelltradingservices]

Patience is key. ;)

[@laughuntilyoucryordie]

One of the BEST option traders to watch on KZbin. Very open to those who watch his channel. I’m learning a LOT! Thanks Markus

[@rockwelltradingservices]

We are glad that you are learning. ;)

[@cawag98]

Thanks for the video. This is now 2 years old. How have you been doing since then and what do you continue to advise, or what have you changed in your recommendations @rockwelltradingservices?

[@rockwelltradingservices]

Check my latest update in my Coffee With Markus and Mark live show from Monday to Friday at 10 AM Central.

[@michaell3134]

this is a perfect example of how TA is most of the time useless. smart money makes the market fluctuate in ways that do not make sense. Why did Markus sell puts at $30? Well if you look at the chart, you will notice that TA indicated resistance building at $30 (i.e., 3 rebounds over the L3M). However, what happened? the stock tanked below $30 thereafter. Everyone, please be aware of these risks. Also, do not go all in on one trade. For instance, if the stock dips, have enough capital to make additional cash to sell cash secured puts in order to reduce your cost basis all while selling covered calls at or above your adjusted cost basis.