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Coach Mak | Know Your Money

May 20, 2023 • 9 tweets • 3 min read • Read on X

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A brief thread 🧵 about a $JNJ Covered Call

It almost went out of hand but stayed patient with it

In the end it worked out

I created $263 of my own dividends in April and May 🔥🔥🔥

Initial call sold on April 3:

- 4/14 $160c
- Premium: $44

#OptionsTrading #Optionselling

Soon after selling that call the price of $JNJ spiked up

It reached $166+ before the expiration date

$6+ more than my strike price

I wasn’t ready to lose my shares

So I rolled to same strike of $160 a week forward to 4/21

Added premium: $47

$JNJ stayed relentless and didn’t budge much

It closed at $162.5+ by the 21st

So I had to roll the option forward again

Again a week forward and same strike price

4/28 $160c

Added premium: $55

Another week same old story

$JNJ reached $163+ by the 28th

Another rollover

5/5 $160c

Added premium: $63

More premium because I rolled over earlier than usual

2 days before expiration

The price hadn’t got too out of hand yet

Same story this week as well

$JNJ staying between $162 and $164

Closed May 5 below $164

Another rollover

5/12 $160c
Added premium: $72

Collecting premiums and still keeping my 100 shares

Finally this week I was seeing the light at the end of the tunnel

$JNJ on May 12 was hovering between $160 and $161

It could expire worthless but by the afternoon it was still $.50 more than my strike

So I rolled again but this time to $162.5

I gave up some premium: - $18

Ok so why did I go to $162.5 now and not before

The ex-div date for $JNJ is coming up

If the option is ever going to get called early it is near the ex-div date

So I wanted to go slightly out of the money for my new strike

And finally on May 19 $JNJ finished below my strike price

My option expired

After all the juggling and maneuvering the option expired worthless

I collected $263 in premiums and didn’t lose my shares

The $263 is more than the quarterly dividend I get from $JNJ

🔥🔥🔥

Learn how to sell options

Using your cash or your stocks

It enhances your overall yearly return

Is it free money? No

Are there risks? Yes

But those risks can be managed

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More from @WealthCoachMak

Coach Mak | Know Your Money

@WealthCoachMak

Oct 2

A Covered Call strategy isn’t a “one size fits all” strategy

There are various different ways to sell Covered Calls

Let’s dive in 👇👇

A thread 🧵

✅ Selling on Long Term Holds

On the occasional times that I sell Covered Calls on my long term shares…

I look to sell at a delta 0.15 or lower

My goal is to make some extra income

And not lose my shares

I do this very occasionally after share prices have jumped

✅ Poor Man’s Covered Call

In my options account if I sell a CCon a stock that’s tied to a Long call

I will sell at around Delta 0.15-.20 or lower

Between a week or a month long expiration date

Read 7 tweets

Coach Mak | Know Your Money

@WealthCoachMak

Sep 24

Options Trading can be as simple or as complicated as you make it

Here’s a very simple one 👇

If you have 100 shares of $NVDA that you bought it at $100…

And want to sell it at $155…

And you want to get paid to wait?

Here’s how you can do it 👇👇

You can sell a Covered Call

Pick any expiry date that makes it worth the premium for you

Let’s pick Dec 20 expiration for this example

You are getting paid $300 in premium

That’s your cash to keep that you receive AS SOON AS the order is executed

What happens then? 👇

Then you wait…

If $NVDA goes to $155.01 or above…

You sell your shares at $155 which is what you wanted to do anyway

For that you got $300

If $NVDA stays below $155…

You keep your shares and now have $300 extra

And then you can sell ANOTHER Covered Call

And get paid 💰

Read 4 tweets

Coach Mak | Know Your Money

@WealthCoachMak

Sep 22

I make over $3,000 USD each week selling options

I have rules to my system

Here are my 4 rules:

It’s no joke I make between $3,000 and $5,000 a week selling options

The collateral used is anywhere between $150k to $800k

The avg is around $600k

Let’s get into the rules that frame my repeatable system…

Then I’ll show you my trade for this week.

RULE 1 - Quality Stocks

The most important thing for me

Sell options on stocks or ETFs that you want to own or don’t mind owning

Quality matters

Read 9 tweets

Coach Mak | Know Your Money

@WealthCoachMak

Sep 7

I make more than $3000 USD on average per week selling options

I have 7 rules to manage my losses/risks:

👇👇

Risk management is crucial

But even with the best risk management strategies I have plenty of losses

Losses are inevitable

Key is to minimize the losses and the IMPACT of those losses

If it’s a quality stock then mostly it is a TIME LOSS until the stock recovers

Rules 👇👇

RULE 1: Quality Matters

Taking a loss on a stock you like for the long term and a stock that you want to own anyway is VERY DIFFERENT than taking a loss on a crap stock

I can take a temporary loss on $TSLA or $NVDA but not on $GME or $AMC

$GME or $AMC might NEVER recover

Read 10 tweets

Coach Mak | Know Your Money

@WealthCoachMak

Aug 25

What is Theta in Options Trading?

Theta measures the rate of decline in an option's value with the passage of time

Time decay

A brief thread 🧵👇👇

Theta...

Also known as time decay is a critical factor in option pricing and a key tool for option sellers

Let's dive into how savvy traders leverage theta to their advantage

👇👇

The term "theta" refers to the rate of decline in the value of an option due to the passage of time

Theta = time decay of an option

This means an option loses value as time moves closer to its maturity as long as everything is held constant

Read 9 tweets

Coach Mak | Know Your Money

@WealthCoachMak

Aug 15

What is Gamma in Options trading?

GAMMA is a crucial concept in options trading that often gets overlooked

It measures the rate of change in an option's DELTA in relation to changes in the stock’s price

Let’s dive into it

A brief thread 🧵 👇👇👇

Quick note about Gamma in Options trading:

✅ Selling options = gamma negative

✅ Buying options = gamma positive

For every $1 move in stock price the DELTA moves by the amount of GAMMA

In simple terms:

✅ Gamma measures how quickly delta changes

Understanding GAMMA is key to maximizing profits and managing risk when selling options

When you sell an option you collect a premium upfront

GAMMA comes into play because it affects how quickly your option’s DELTA changes as the underlying stock price moves

Read 7 tweets

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