How To Buy Back and Roll Out Covered Calls For More Income: Beginners Tutorial

In this video, I'll show you how to buy back and roll out your covered call contracts for more premium.

This is a strategy I usually use when I see my option contracts decay to around 50-80%. I'll buy back the contracts to lock in my profits and then sell further expiration dated contracts to get more premium from the larger extrinsic value.

Remember that you want to always be bullish on the stocks you own when you sell covered calls. Make sure the companies you choose are in the S&P500/DOW30, have strong fundamentals and technicals, and most likely pays a dividend. These are the companies I found that are more reliable when it comes to selling/writing covered calls for income.

Hope this helps and brings you a lot of value! :)

Let me know your questions down below!

-Steve

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[okayyyy]

I see how you were a grade school teacher, very good at explaining

[donjr]

It's all thanks to Steve, I learned about selling covered calls and grow my portfolio exponentially. Thank you Steve!

[forthepeople-rp]

Great explanation how to get in, out, and roll covered calls. One thing to remember though is that if you close your covered call option early to gain a 50%-80% profit, that means that you will not receive the full premium given when you first sold the covered call.

[timijeboda]

Thanks for your videos. It really slows the noise and open one's eye on the details of the roll process. Keep up the great job. will keep checking your channel

[liz]

Great 👍. I love to watch your videos. it's helpful for me

[mikevorhis]

But if the underlying stock is going down or trending sideways, why not just let the covered call option expire, keep the original premium in its entirety, keep the underlying stock too as a result, and just write another covered call with a later date and potentially different strike price? Why buy back something you're going to effectively make defunct by changing its date? The only reason I can envision for buying back a covered call is if you intended it to expire unassigned, but now the underlying stock value is RISING and your call is threatening to make you lose the shares (which you don't want to do). Can you explain?

[clausbohm]

Why would I buy back my call options if I am already getting the premium when they expire worthless and I plan to own the stock for a long time no mater the swings? I kinda understand the roll over and that may be the reason to continue to get sizeable premiums. But ... there to, if the stock drops in price, then rolling over the premium will also be less if you maintain the same strike price. There seems to be only two reasons, to buy back the shares because you realize it will go higher then the initial strike price or to get the hell out of the stock before it goes even lower. In either case the premium doesn't mater and not in favor (as I see it). Also some of these premiums are only 1-2 cents so that makes this all mute anyway.

[flexinbalut]

Thank you so much steve working on gaining 100shares or apple so i can start doing option trades thank you for the great info always

[nMeScArZz]

Hey Steve, I’ve been watching a lot of your videos lately and would love to see a video on a poor man’s covered call!

[jgoemaat]

Great video as always it would be helpful to discuss Delta and theta a little bit so we can see how the further options decay faster which is why I’m guessing you’re going further out. also, maybe discuss your thinking on how you chose the strike price at a certain Delta or such a percentage from the current strike price or what your methodology is there’s a lot of strike price and expirations
to choose from so the viewer has no idea why you chose these. Thanks!

[emotions]

Amazing as usual. Always interested to go further into limit order with selling options.

[StanleyC-vxjz]

Is there any platform that can practice paper trading before doing real trades? Want to have a hang of it first.

[MrMusico]

I'm just recently watching your videos you have the same example using fidelity? Thank you

[dancer-rhif]

Good presentation! Do you sell/buy contracts with trying (timing) to collect dividends too? If so, how about a video on how you would approach this strategy.

[adamwright]

Would love to know more about rolling up and out to prevent options from being called away/exercised

[Play-Time-HD]

Hi. Can we use covered calls for residents in malaysia who bought etf?

[szaky]

If you sell covered call and the stock shoots up. When is the best time to roll for a higher price? Wait till before the contract expires then roll or roll right away? I mean which will be the cheapest way to roll?

[kakitling]

Thank you so much for your video, you opened a door for me to earn some passive income in my retirement. I have one question about selling cover call. If I sell a cover call at $10 which expire at the end of next month, from now and the end of the month, if the price goes higher than $10 in the middle of the contract, will my shares be called away on that date or at the end of the month?

[blp]

Which TOS format are u using?
Much nicer than what comes up when I open TOS

[sconchee]

Question: If you buy or sell AT MARKET or most recent trade are you not concerned slippage or a drastically different price may end up executed? If liquidity is an issues, for example, a huge gap may occur…and not always in your favor.