Covered Call Options Strategy Step-by-Step Tutorial

@ericnomics

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Selling · SaaS › Finance Software

Robinhoodseen in 19 videos →

Why it worked

The video provides a clear, step-by-step tutorial on a potentially lucrative options strategy, using a well-known stock (Tesla) and demonstrating tangible financial outcomes. The creator's personal experience and the promise of consistent income likely resonate with viewers interested in stock market investments.

Summary

This video explains the covered call options strategy using Tesla as an example. It details the steps involved, including owning 100 shares, selling a call option with a specific expiration date and strike price, and the potential outcomes based on Tesla's stock price.

Structure

1Introduction to covered calls and their benefits
2Step 1: Own 100 shares of a company (using Tesla as example)
3Step 2: Click 'Trade Options'
4Step 3: Select 'Sell Call' and choose expiration/strike price
5Explanation of profit/loss scenarios and estimated credit
6Demonstration of past trades and consistent income generation

Original caption

Covered Call Options Strategy Tutorial This is a beginner friendly strategy that makes extra income on stocks you already own I personally use this as one of my strategies Let me know in the comments that you want to see next

More from @ericnomics

Their other posts in the index, biggest breakout first.

Product placement

Robinhood (app/website): The platform where the options trading is performed. It ACTS as the interface for the strategy. Removing it would change what happens in the video. Tesla (TSLA) (stock): The underlying asset for the options strategy. The video shows its stock price and discusses trading options on it. Removing it would change what happens in the video.

Call to action

so make sure to drop a follow if you wanna see more option tutorials like this and let me know in the comments what you wanna see next

On-screen text

Covered Call Options Strategy Step-by-Step Tutorial Generate $100 - $600 every week #1 - own 100 shares of any company #2 - Click trade options #3 - Hit Sell Call Expiring November 7 (11d) Strike price Breakeven Chance of profit % Change Change $505 $510.13 85.27% +124.02% $500 $505.95 83.56% +126.24% $495 $501.85 81.75% +124.59% $490 $497.90 79.85% +125.71% $485 $494.50 77.85% +124.69% Contracts 100 Shares Each 1 Limit Price Bid $5.90 - Ask $5.95 $5.90 High fill likelihood Time in force Good for Day Estimated credit $589.96 $5.90 x 100 multiplier $0.04 est regulatory fee Individual investing Review Order 0.4 Shares Available Expected profit and loss +590.00 TSLA price at exp $505.95 (+10.40%) TSLA $458.25 (+5.66%) TSLA sell Call Builder Buy Sell Call Put Expiring November 7 (11d) Strike price Breakeven Chance of profit % Change Change $505 $510.23 85.10% +128.38% $500 $506.05 83.36% +130.04% $495 $501.98 81.52% +128.57% $490 $498.05 79.64% +130.00% $485 $494.25 77.68% +128.40% Contracts 100 Shares Each 1 Limit Price Bid $6.00 - Ask $6.10 $6.00 High fill likelihood Time in force Good for Day Estimated credit $599.96 $6.00 x 100 multiplier $0.04 est regulatory fee Individual investing Review Order +600.00 TSLA price now $458.72 Tesla History Recent Sell TSLA $490 Call 10/31 Individual - Oct 24 Buy TSLA $500 Call 10/24 Individual - Oct 23 Sell TSLA $500 Call 10/24 Individual - Oct 17 Buy TSLA $540 Call 10/24 Individual - Oct 17 Buy TSLA $500 Call 10/17 Individual - Oct 14 Buy TSLA $500 Call 10/17 Individual - Oct 14 Tesla Limit Sell

Transcript

This is a step by step tutorial on how to do a covered call. It's a beginner friendly option strategy that generates extra income on stocks that you already own. Sounds good, right? Let's get into it. Step number one, own 100 shares of any company. And this is a must, otherwise you can't do it. For this example, I'm gonna be using Tesla because I own 100 shares. Step two, click trade options. Step number three, hit sell call and find expiration date between one to four weeks out. That's my personal preference. For this example, we're gonna use the $500 strike price. Currently, Tesla is trading at $458 and we're betting that it will not hit $500 by this date. So it needs to increase about 10.5, 10 and a half percent by November 7th in order to reach that $500. And in doing so, we will get compensated $600 to enter into this trade. So if Tesla stays below $500 by November 7th, I keep this whole $600 and we walk away as if nothing happens. Now if Tesla hits $500 or above by November 7th, I'm gonna be forced to sell 100 shares of Tesla at $500 per share, but I still keep this $600 regardless. And I would do this week after week after week, collecting $111, $236, $163 and hundreds of dollars every single week. This is one of the many option strategies that I personally use. So make sure to drop a follow if you wanna see more option tutorials like this and let me know in the comments what you wanna see next.