1 of ? OK, AMC, will do a covered call for educational purposes only. Step by step. 1st, look for Aug 27 50% yield premium. OK, strike 43. Now at .43 on the bid. But, I want to sell for a call away so I will take the 36 at 1.49, filled! Note, the 43 is Delta 14 and the 36 ....
The 36 is Delta 42 which means 42% probability that it will be called next week. Theta .15, Gamma. 07 and IV 111%. I would normally take the 43 but, I want to sell more puts. I am currently working my way out of all other stocks and options to concentrate on AMC.
Explaining this covered call trade - 1st step, looking for the strike price that will give a 50% yield minimum which is simply 1% of the strike price on a weekly or 4% of strike price on a monthly. In reality it would % of $ invested in the trade but I am keeping it simple. 1st
2nd, open the Options Chain for Aug27 expiration. You need software with the greeks. If not then use Yahoo Finance for practice or whatever to find the options chain. Scroll down to find the 1%. The photo from YF (this morning) has strike 43 at .41 bid but Friday is was .44+. 
3rd - now open the hourly chart and look where the last 30 days resistance and highs are. I am checking to see if TA shows that 43 is above 30 day resistance. Currently we have resistance between 36 and 40. So I would have taken this trade on a weekly.
4th - I only do this with sacrificial shares. Example, If my goal is to own xxxx shares for the squeeze then I will buy xxxx plus 300 using the 300 to sell CC or start the wheel as they say. Each contract requires 100 shares. Note I have now my xxxx shares plus 900 to sacrifice.
5th - there is a lot more to this involving IV, Delta and Theta. Example, I want IV at minimum 100% and high velocity price movement as this drives the premium much higher. .43 on the 43 strike was low, normally seeing on AMC twice that on strikes that distance OTM.
6th - here is the chain line from my trade. I took the 36 strike so to increase the chance it is called, simply so I can the start a strangle which is selling a Put and a Call contract on both sides of the stock price. OTHERWISE, I would have taken the 43 strike.
7th - Note, on 36 strike the Delta is .42 and the Theta is .15. Simply interpreted as 42% chance the stock price will be at 36 on Aug27 and the premium will fall by $0.15 per day. Noting this is changing as the stock price changes.
8th - I can buy to close the Option at any time up to closing on Aug27. With Theta decay the option price will go down very fast if the stock price goes down. If the stock price goes up the option price will go up but Theta decay will continue to to eat away at that increase.
9th - I and looking to close out this trade on any down day where the option price is 50% lower than what I sold the CC for, in this case 1.49 divide by 2. I sell CC on up days and buy to close on down days.
10th - this is not financial advice, options are risky and requires training. This is only a strategy example for learning purposes only. #apestogetherstrong #AMCtothemoon
11th and final on the mechanics of a covered call.
Terms STO means sell to open which is not the same as the sell order. 1st you must STO a covered call. To close the trade before expiration you must BTO or buy to close which is not the same as Buy.
Terms STO means sell to open which is not the same as the sell order. 1st you must STO a covered call. To close the trade before expiration you must BTO or buy to close which is not the same as Buy.
12th and beginning of the concept of greeks. Without the training for how the derivatives are calculated you would be seeing the greeks as another language. I will simplify it only in terms of trade velocity which is all I really care about. This is where patience is important.
13th - Trading options without velocity is a waste of your shares. Example, in June on a 1 billion volume day on a sharp move upward I got $17 per share selling a monthly 145 covered call. I closed it 1 day later at $8 per share for $900 profit in 1 day on 1 contract.
14th - Greeks in simple terms. Delta measures the probability at that moment that strike price will be the real price at expiration. Theta measures the amount of Option price lost in terms of price based on speed of the move. Gamma and Vega is not interesting to Option sellers.
15th - Gamma and Vega are important in gaining more experience and understanding but you can trade for a year and worry later about them. Patience is required to wait for upward velocity to sell your call. Low volume days can be OK if you use the open or close for velocity.
16th - On Friday the volume was low but we had velocity into the close. Premiums were OK but not good. It is the difference between 50% yield or 500% yield on a weekly. So in summary forget the greeks and think in terms of velocity and volume. This covers mechanics and timing.
17th - final note on this thread. The premium you receive at the moment you STO is yours to keep no matter what else happens. #AMCNOTLEAVING
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