50X Poor Man's Covered Calls Strategy in Robinhood

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𝐋𝐞𝐠𝐚𝐥 𝐃𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞: I’m not a financial advisor. The information contained in this video is for entertainment purposes only. Before investing, please consult a licensed professional. Any stock purchases I show on video should not be considered “investment recommendations”. I shall not be held liable for any losses you may incur for investing and trading in the stock market in an attempt to mirror what I do. Unless investments are FDIC insured, they may decline in value and/or disappear entirely. Please be careful!

[teekith]

No one mentions what happens when the price goes below the leap option strike price. To sell calls against a leap that is below the leap strike price, most brokers require margin to make up the difference, because your leap collateral is close to worthless regardless of time frame. Just because you can do this, doesn't mean its a good idea.

[Freneticly]

Thanks for explaining the strategy. Good video, thanks.

[KBBAKTHA]

this video lacks focus. You started with BABA but then jumped to AAPL chose $140 for long call paying $35.40 (break even is $175.40) but chose $167.50 for selling call and say 10 % return. suggesting a strike lower than break even in a tutorial is absurd. Then for no reason you jumped to PLTR, which you told me that wont fit into my portfolio. Sorry to point out but kindly be focussed and guide people. You have been very successful, there is no doubt. your tutorials should should be simple and focussed on the entire nuances of PMCC, than jumping from one example to another without elaborating on how a stock should be selected, why a particular strike and why covered call should be sold above break even point etc.

[rick-vqis]

Buying the Jan 2024 $5 PLTR call and selling the Jun 2024 $9 call will leave you with a naked call after the Jan option expires and most brokers will not allow you to do this.
This is probably the most confusing video you have done. Try holding on to a LEAP during a down or flat market and you will fear these.

[udy]

Rollover strategy doesn’t make sense… since you are loosing the intrinsic value… either you rollover or sell and buy again… its exactly the same… the inly reason why you rollover is, to have the collateral intact when you have open state short options you sold to someone.

[dereklee]

hey Henry how do I buy multiple call or sell option because on mine it says i can only buy a single call or sell option please help me

[udy]

Be aware Butterflies are risk of getting assigned. Since you sell the combination of call and put credit spreads… there is a fair chance your sold positions will end up in the money either side. My 2 cents.

[eman]

Henry I am trying but robinhood said, "nah". Level 3 options won't enable

[TheDale]

I understand wanting to buy a leap with a Delta of about .7-.8, but isn’t the Delta changing all the time depending on the price per share?

[michaelgavin]

Very informative Henry, just a question though. When purchasing the leap call option, a it seems a lot of premium goes into the time frame. Say for instance you are selling. A 0.2 delta call against your leap, and it becomes in the money and you start to take a loss. Is there anything that can prevent you from getting assigned and having to sell your leap? Or would that not matter as much since if the call you sold at 0.2 delta is now in the money, that means that your leap also has grown substantially from the rise in price for an overall profit?

[uncletan]

So if the price goes above the Sell Call strike price and we have to exercise it. Than we can close it with the long period Buy Call and it will still profit and we do not have to Buy the stock. Mean closing the Buy Call and Sell Call together.

[SmilingSynic]

Selling covered calls is equivalent to selling puts. If one wants to limit one's risk, don't buy a LEAPS call just because you want to sell covered calls. Sell puts but use less leverage. Not necessarily cash-secured puts, but diversify one's portfolio and spread the risk around., or buy a put further out, so one has a lower risk bull put credit spread.

[gainsum]

I'm confused more now than when i was before this video.

[Crowe]

So I really been trying to study options and I think NOK seems to to be closest to everything you have said. Would that be a good choice?

[jamiehackney]

Henry do I have to have level 3 on Robinhood to do PMCC?
I cant get approved.

[pedrosalcedojr]

do you need a level 3 account on robinhood to be able to do call spreads

[brianquigley]

Henry, great video. much valuable info here. I trade diagonals all the time. Can you please tell me how you hedge this set-up. I'm NOT concerned with upside gap bc I set up the diagonal so no loss on upside. If XYZ gaps up i usually don't chase. I take profits and run, but what about downside GAP, how do you mitigate that risk? Downside is most concerning to me.

Thanks for this very good video.

[echolitis]

Got a question, If the stock is getting near the Short Call (Covered Call) Couldn't I just buy it back then my long call that is over a year out (leap option) continue to make me money if the stock is moving a lot so I'm not limiting my profits of the covered call?

[richardgordon]

Thanks for an excellent presentation/explanation! Much appreciated 😊

[optionfinder]

Why does your acct size matter? If the strategy works, why do you not still do it? You could spread your capital along more positions.