Crypto miner & options seller | Documenting my entire journey on X | Learn how I am making $1000s every month selling options. DividendExecutive on Youtube
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Covered calls aren't free money.
The biggest risk isn't the option premium.
It's owning the stock.
Collecting $200 in premium doesn't help much if the underlying drops $2,000.
The underlying matters more than the premium.
Made the mortgage payment this morning and my first thought was "ouch."
My second thought was that I've got a home, a family, a roof over our heads, and food on the table.
Perspective changes everything. Truly blessed.
Covered calls in 30 seconds:
Own 100 shares at $50.
Sell a $55 call for $1.00.
Collect $100.
Stock stays below $55 โ keep shares + premium.
Stock finishes above $55 โ shares can be called away at $55.
The tradeoff:
Income today
Limited upside above $55
$AMZN faded from 259 to 249.67 this week
Bounce-short zone: 254-260
Needs a daily close under 242 to break down
Target: 239 (pivot lows, 200dยฟ241)
Close over 263 & we go up
Options are pricing about +/-7.7 this week.
Jobs report Oct 2.
STSLA got smacked off 387 Friday.
โ
Here's the map for the next 2 weeks
Dip buy zone: 354-366
Needs a daily close over 387 to break out
Target: 396 (right at the 200d)
Close under 345 & I'm wrong
Options are pricing about +/-17 this week. Jobs report Friday could shake it up.
One rule I have with CSPs:
Don't sell a put on a stock that would make me panic if I woke up owning 100 shares tomorrow.
Assignment isn't necessarily a failed trade.
Selling puts on companies you never wanted to own in the first place is where problems start.
Stop looking only at the premium when selling puts.
Calculate return on collateral.
$90 CSP
$200 premium
$9,000 collateral
$200 รท $9,000 = 2.22%
If thatโs a 30-day trade, youโre collecting 2.22% on the capital securing the position.
If you are trading naked, you can probably go down another 5 strikes & get the same return on buying power.
Always know what the capital is actually earning.
$HOOD Daily chart
Price: 119.40
Trend: Above rising 20d and 50d, higher lows since Aug
Buy zone: 111-115
Breakout: daily close above 127
Target: 134
Invalidation: daily close under 108
Position: 160 shares uncovered, cash secured puts & leap puts. A few lotto calls on the table as well.
Key dates: Jobs report (Sep) Oct 2, FOMC minutes Oct 7 (expected).
Outside window: CPI Oct 14, FOMC Oct 27-28, earnings Nov 4.
Selling puts is one of my favorite ways to potentially buy stocks cheaper.
This year alone Iโve sold 1,345 contracts.
Example:
Stock: $100
Sell $90 put
Premium: $2.00
Expiration: 30 days
I collect $200 immediately.
If the stock stays above $90 โ keep the $200.
If assigned โ buy 100 shares at $90.
Effective cost basis = $88.
Thatโs the basic idea behind a cash-secured put.
The whole goal is to get PAID to buy a stock you wanted to purchase for a cheaper price. If you donโt get assigned, you keep all your premium and try again.
There is nothing better in this planet than this right here.
โ๏ธ Done with the 9-5 for the week
โ๏ธ Market is closed
Time to soak in some time with the ones we all work are asses off for. Blessed ๐
$HOOD Weekly
Price: 120.82
Trend: Higher lows since March, 20w crossing above 50w
Buy zone: 108-113
Breakout: above 127
Target: 140
Invalidation: weekly close under 100
Earnings Nov 4 could be the catalyst.
Iโve got covered calls at $124 for tomorrow.
Long shares & lottos