This was very helpful. As a new options trader having a system in place is what I have been trying to figure out.
What's funny is i actually sort of figured this all out on my own just from doing it for a while
Very good stuff, but you should talk about when you get assigned and the stock falls too low to do Covered Calls. How to DCA down by selling more CSPs in increments down until the market goes up to pick up CCs again.
Thanks Erica, great video as always. I love the part about stacking/staggering the contracts as a may to smooth out the risk. Very curious to learn in the next video about downside of CSPs and why (and how often) you sell credit spreads instead. In terms of "being the insurance company for institutions", that can be precisely why selling puts can be a good thing, since many institutions are mandated to take out insurance and hence why premiums tend to be inflated, which benefits the seller. And in terms of being exposed to a crash from a CSP, the same is true from owning the shares anyway so not sure I get it.
With AAPL going down 30% in 3 months, and tarriffs at 35%. If tarriffs had stayed that way for a year. AAPL easily could have gone done over 50%. I don't fault her for selling. Seeing your account go down that fast with the possibilities of losing all your gains. That is a scary feeling.
Aren't the 'high premium' options high because of the high IV ?
Why don’t you sell put spreads? Your ROI is so much higher?
@AbundantlyErica