14 years of great income selling covered calls

I got started selling covered calls back in 2010 before most people had any idea that they could and should sell them. Back then few if any videos existed on how to do it. I believe this is one of the safest and best ways to make extra income. I now make nearly 2k a month just on my covered call premium. In this video I share my strategy and a few examples.
I have been on a journey to learn the right way to trade stock options. Along the way I have decided to share with others both my successes and failures. My hope is that others can learn and shorten their journey to learn how to incorporate one of the best ways to make passive income.

Thanks for joining me on my journey!

Uncle Jim

My Blog with my options strategies, monthly reviews, and lessons on getting started.

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[MJIKS]

I also like to recommend to try and pick 4-5 stocks that are not correlated to each other. That way you have variety in outcome on your options. It’s nice to have some stocks that go up or down somewhat Independent of each other. I like to utilize commodities to achieve this like oil, nat gas, gold…

[willydear]

I don't defend my covered calls when they go in the money. I look for 1 percent premium per month with 5 % per month out of the money. I had 200 shares called away last month and if the price drops back down soon I'll buy again. Plus I invest in dividend paying companies. Triple income from dividend, stock appreciation, and dividends is the way to go. 20 to 30 delta is my sweet spot.

[chriscoffey]

Jim,
Great content as usual. I constantly remind myself that a 20-30 delta covered call being called away is often the ideal outcome. I think this is true especially with high beta stocks having expensive PE or P/FCF metrics.

[djk-sive]

Delta is not a probability....It only measures the distance from the stock price. Nothing about the delta calculates probability of any occurrence.
For your more active members selling shorter duration options and then selling again and again provides greater percentage returns than selling once for longer duration. Selling shorter duration options also reduces risk as they cover a shorter period.
You might talk at some point about realistic expected returns from a portfolio perspective using your techniques.
Thanks for your video.

[bluecollarbullionballer]

Been doing the wheel syrategy for awhile.With your inspiration did my first put credit spread.Not many contracts see how it goes.

[ILoveVehicles]

Really great description and visual of the CC "chaining'. Thank you! I notice, though I might have miscounted, that you haven't used all of your KO shares for selling CC. Is there a strategy reason for that? Thanks!

[EriksJourney]

Sold a 0 DTE put credit spread today for $224. If I could do that successfully 3 times a week I’d be great!

[dannyg]

Im practicing covered calls in TOS. Why does it show Net Liq in ( ) for the that option line? In the paper money account i did buy 100 shares of the underlying stock i was written the CC. That would be negative correct?

[zshn]

What do you think about high yield ETFs?

[blp]

If you sell an at the money CC and then the stock goes up and you choose to buy to close, is the BTC amount usually about the same as the increase in the value of your shares?

[AndyLee-ymcs]

Jim, This all sounds so easy to make money but I have found it's not (because I haven't been using stop losses). I am primarily a real estate investor and have no experience trading options. I don't really care to hold stocks and I would think that selling ITM calls would be an easy way to make money. For example, Dell is selling at $134.50. I can buy 100 shares for $13, 450 and sell the June 14 $134 (slightly ITM) call for $4.75. I collect the $475 premium and set a stop loss on the stock for $129.75. So, at worse, I break if the stock goes down. If it goes up, it gets called away at $134 and I keep the $475 premium. Is there something wrong with this strategy? Thanks Andy