Start by trading covered calls. You cannot lose money. (Standing by for the arguments about that, but I will win them). After you learn to do covered calls, try cash secured puts. Then branch out into naked calls and puts. I think I already said it, but all that exotic crap you hear about.. condors, butterflies, straddles, strangles... is a waste of time and money. And the best thing I ever read about options is that you never make money buying anything. Find the right horse, and it can be a very lucrative ride

dyodd, ymmv, etc etc

Oh no please don't bring that in here.... Start another thread. Ever see Good Will Hunting? Why pay a lot of money for something you can learn for free at the public library?

I thoroughly disagree with you here, saying that spreads are a waste of time and money. Assuming you understand them and know how to manage them they’re far more capital efficient than your typical covered call. If I can buy a cheap wing for say, .25 and preserve $2-$3k in buying power, this allows me to do a lot more with my buying power versus devoting all to a few trades. The key is trading small and trading often to tip the probabilities in your favor.

however, I prefer naked puts to maximize my premium and for management purposes. It’s much easier to keep rolling a naked put and collecting premium as you go versus a spread. The more spreads, the more difficult to manage.

I hear ya. Story stocks do have a track record of providing life changing returns provided you aren't left holding the bag when the story ends up not being as optimistic as the price. Also, IMO it's alittle bit of a dangerous precedent to compare TSLA and Amazon. Even in its early days Amazon had a track record of positive cashflow from Operations. Will be interesting to see how the next decade shapes up

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Question for the Options Crowd
 

With a hypothetical play portfolio of $100,000:
-How many positions would you hold?
-Do you keep them equal in size?
-How far out would you be buying/selling premium?
-How often are you trading in/out of positions?
-How much time are you spending per day/week/month managing the positions?

How has the C19 impacted your rental property business? Is it a fulltime rental or a vacation property?

-15 positions

-Equal Weight

-No options aside from maybe long SPY put for hedging.

-Trading in and out of maybe 25% of positions(mostly when stock reaches intrinsic value or above)

-1 hour a week browsing company and industry updates via weekly email alerts. At least 30 mins per stock when Annual Reports drop

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Not following the TSLA cash flow argument:

https://www.thestreet.com/investing/tesla-gains-after-reporting-strong-cash-flows-7-key-takeaways-earnings-elon-musk

Not comparing TSLA and AMZN (two completely different industries). I am just saying that it isn’t right to say that TSLA is over valued at its current SP.

one of my fav movies! Ok where do the rookies start with covered call education? Is there an outline, book, reputable YouTube out there to start the education ? Thx


Note: NM I found replies earlier Talking about tastytrades. Illl check that out

Tasty Trade is good.

Covered calls are really simple. Option contracts are 100 shares. You can do weekly expirations and monthly expirations. You pick a stock you like, buy 100 shares and then you can sell calls against your shares.

Example:

Stock XYZ you buy for 100$ and sell 120 calls against it. Calls sell for .40cents and expire in 8 days. You collect 40 dollars and if the stock is below 120 on expiration you keep the 40 and the stock and then rinse and repeat. If the stock closes above 120 then the option buyer has the right to call the stock away and pays you 120 per share. You made 20 per share and keep the collected premium. You could lose money on the stock but you can't lose money on the option. The option premium acts as a small hedge as you can lose on the stock as long as it is less than the premium. The premium has the effect of lowering your cost basis.

This is a Buffet play, he sells a lot of calls against his positions. I have sold calls against my positions in my self directed IRA for decades and it juices the returns without increasing risk or using up capital.


Edit: Almost forgot. This is not trade advice or a solicitation. Seek advice from a qualified investment advisor. Past performance is not a guarantee of future gains. There is risk in trading levered products and only trade with risk capital. ETC. ETC. ETC.