Rolling A Covered Call Option Tutorial: Why, When And How - Trading Like A Pro

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Rolling A Covered Call Option

Intro: 0:00
What Is Rolling A Covered Call?: 0:34
Why Roll A Covered Call?: 3:10
How To Roll A Covered Call: 7:31

Rolling a covered call is a strategy where you buy back the call that you sold and sell another call option - usually with a different expiration date - at the same time.

In this video, we will discuss the Why, When, and How:

1.) Why would you roll a covered call?
2.) When Should You Roll a Covered Call?
3.)How To Roll A Covered Call?
- Rolling up and out
- Rolling down and out
4.) Can you roll a covered call forever?

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#StockMarket #TradingOptions #OptionsTrading
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If you found this video helpful, give it a LIKE so I know to make more videos like this. If you have any questions let me know in the comments.



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rockwelltradingservices
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I rolled this week because I was getting called out and did not want to pay tax on the sale of the stock.

waveskier
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I must admit the wheel strategy is a great strategy. Thanks for sharing this for all of us.

exploringwithdave
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Thanks Markus. Great video and explanations. I just started covered calls but I was waiting for them to expire before getting into the next week position. Now I can do this. Learned something new!

markridao
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First question is that why did you bough shares at 37.50? There is no support level, you got greedy :). I love your trading style. Keep it up. Learned a lot from you.

ataleofgames
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Great Markus as always. Very clear and precise. In your own experience, what do you normally practice - Rolling up provided you collect a credit or Rolling Down. Rolling out only if you are wanting to hold the stock for a longer time. Please share your thoughts. Thanks

alphabeta
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As always this is a great video Markus. A caveat, (I think needs to be considered), is that while you can roll the covered calls forever, if they get too far in the money there is no premium. This will happen if the stock/underlying jumps up quickly.

stuffer
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@4.57, if you have to buy back .50 option for $1.00 (0.50 loss), but you receive $1.60 for July 02 contract, isn't the profit per contract 1.10 instead of .60 x 2700?

mt-fyqf
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I just evolved with your precise explaination!

JustinY
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Never seen a more beautiful sideway chart in my life - CWH. Buy at $37 and Sell it at $41 and then Short it at $41 and Buy it back at $37. And then combined those with the Call and Put Options and sail to the Sunset in Florida. I am going to get rich with this one stock in 2022 :)

BoxerRT
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Great explanation. Your remark about having a tight bookkeeping system in place is very valid! It’s one of the cornerstones of successful trading and I wouldn’t be surprised if a lot of people neglect this 😢

Pieter
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How far out, time, do you write calls?

donaldevans
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Hi Marcus, congrats again for the very useful video! It's great as always. :)
This week I rolled one of my naked puts on AA for the next week, because with the current market condition probably most of my positions would be assigned and I decided to keep the margin small instead of paying full price for the stock.

tervelacademy
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Which are the three indicators you are using?

bastianstieg
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Great video THX much...
I have a question:
While rolling a covered call...
In order to make a profit(net credit)...
1)Is it best to do it on day of expiry or before?
2)Is it best to roll when stock if running up or down?

I have meta calls deep ITM expiring Friday...
Sold To Open 1 contract META Jun 09 2023 240 Call at limit @ $6.65

I don't wanna sell this at 240$ price!

krisragu
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Still, as commented and not answered on the last video: how do you get to add up the credit and completely disregard the premium you paid for the call you roll?
Only benefit, unless you can show otherwise, is that you profit from additional stock gains with a higher strike

wer_ist_paule
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Thank you for the video, with spectacular explanations. But I still have a question:
You mentioned you've never Rolled UP & OUT, but do you believe this is a realistic method to make money, to sell weekly covered calls on a continually growing stock?

parthamis
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@1:03 - you sold put options @$37.50 - 27 contracts. Doesn't that put you at risk - obligating you to buy (if exercised) over$101, 000 of CWH?

idsullymichaels
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Very well explained. Is there any advantage rolling a call vs doing that via 2 separate orders in terms of commissions? I'm using IBKR. Thanks!

Hep_p
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Hi Marcus, At minute 5:35 you start explaining possible outcomes after rolling the covered calls to collect the .60 in premium, however, I'm not sure why you're including $1, 350 as profit from before when those calls were the ones that were rolled over... isn't the profit JUST the $1, 620 from the rolled calls + 4, 050? Not understanding how you got to 7, 020 ... thanks a lot for your time

pesoathome