Trading Options: One Simple Income Strategy
Trading Options: One Simple Income Strategy
Options Trading Pro John Napolitano explains the "poor man's covered call" options strategy in his recent video, an income generating approach that entails buying long-term LEAP call options and selling shorter-term monthly calls against them to collect premium, requiring less upfront capital than covering the stock outright yet yielding high annualized returns through compounding if managed properly over time. John walks through an example with Alibaba stock and demonstrates how the trade could hypothetically deliver 141% on invested capital in one year, emphasizing that dedication and risk management are still required, though options do present wealth-building potential for those willing to educate themselves and put in the practice.
Trade Options with John Napolitano
stocktradingpro.com/trading-options
Introduction
John Napolitano introduces himself as the options instructor at Top Trading Pros
Basics of Options Trading
Options require dedication and practice like other skills
Two main types of options trades: shorter term and income generating
"Poor man's covered call" options strategy explained
How to Set Up a Poor Man's Covered Call
Choose a well-known stock in a downtrend near 52 week low
Go out at least 1 year on options chain to buy a LEAP call option
Example with Alibaba stock and 70 strike call option expiring January 2025
Cost is $1,400 instead of $7,200 to control 100 shares of stock
Managing the Trade Over Time
Sell monthly call options against LEAP to collect premium
About $165 per month projected with Alibaba example
Roll strike price higher each month as stock appreciates
Results in 141% projected annual return on capital
Key Rules and Risk Management
Define max profit zones and loss limits
Close out trade if stock blows past short call strike
LEAP call increases in value if stock rises
Conclusion/Call to Action
Visit Top Trading Pros site for more strategies/coaching
Subscribe to channel for more educational videos
Options trading takes practice but can create wealth
Transcript
Good morning everybody. Hope everybody's doing great. John Napolitano here with you from top trading Pros.
For those of you who don't know who I am, I am the options instructor here at top Trading Pros and it is my sole job to teach everybody how to trade options in themarkets effectively and with the right strategy based on what's going on in the markets. There is so much garbage out there on YouTube about one strategy or two strategies or oh, you only need a little bit money in your account to become a millionaire and blah, blah, blah. And it really gets my blood boiled because I've been doing this for over now two and a half decades.
I've worked on Wall street for over two decades. I've traded my own capital since then. And what really bothers me the most is when people think that this is just some get rich quick scheme options trading, like anything in life, requires dedication, discipline, practice and time.
If you really, really want to learn this skill, I encourage you to click and subscribe to this channel like this video and I'll keep producing more as well as check out our website, toptradingpros.com. I have a free ebook you can download to learn my strategies and to learn some of the logic behind how I set up my trades. And also we offer coaching, discord as well as trade alerts and a newsletter.
So these are all the things that we offer at top trading Pros. So please check us out when you get a moment. But what I'm going to talk about today, the reason for this video is a very simple income generating strategy.
A lot of times we talk about trading and about shorter term strategies, but sometimes there are just times in the market when it doesn't make sense to do that. Or you also want to have maybe a slower paced income generating strategy that's kind of working in the background. And that's what I'm going to talk about today.
There's a strategy called the poor man's covered call. It's a really cool strategy. I didn't make up the name and I'll explain to you why it's called the poor man's covered call in a second, but I'm going to jump right into it.
Now, the best way to kind of talk about this is to show you a live example. And that is what I'm going to do today. So without further ado, let me share my screen with you here.
I'm going to jump right into it. And what I did was I picked just a name. Now, there are rules.
So like I said, if you want to learn how to do this strategy the correct way, and you want to learn a little bit more, please check out our website, toptradingpros.com. But I'm going to show you just the basics on how this works. You generally want to pick a stock that is well known.
John Napolitano: Options Trader
Support: [email protected]
Disclaimer:
https://toptradingpros.com/disclaimer/
Options Trading Pro John Napolitano explains the "poor man's covered call" options strategy in his recent video, an income generating approach that entails buying long-term LEAP call options and selling shorter-term monthly calls against them to collect premium, requiring less upfront capital than covering the stock outright yet yielding high annualized returns through compounding if managed properly over time. John walks through an example with Alibaba stock and demonstrates how the trade could hypothetically deliver 141% on invested capital in one year, emphasizing that dedication and risk management are still required, though options do present wealth-building potential for those willing to educate themselves and put in the practice.
Trade Options with John Napolitano
stocktradingpro.com/trading-options
Introduction
John Napolitano introduces himself as the options instructor at Top Trading Pros
Basics of Options Trading
Options require dedication and practice like other skills
Two main types of options trades: shorter term and income generating
"Poor man's covered call" options strategy explained
How to Set Up a Poor Man's Covered Call
Choose a well-known stock in a downtrend near 52 week low
Go out at least 1 year on options chain to buy a LEAP call option
Example with Alibaba stock and 70 strike call option expiring January 2025
Cost is $1,400 instead of $7,200 to control 100 shares of stock
Managing the Trade Over Time
Sell monthly call options against LEAP to collect premium
About $165 per month projected with Alibaba example
Roll strike price higher each month as stock appreciates
Results in 141% projected annual return on capital
Key Rules and Risk Management
Define max profit zones and loss limits
Close out trade if stock blows past short call strike
LEAP call increases in value if stock rises
Conclusion/Call to Action
Visit Top Trading Pros site for more strategies/coaching
Subscribe to channel for more educational videos
Options trading takes practice but can create wealth
Transcript
Good morning everybody. Hope everybody's doing great. John Napolitano here with you from top trading Pros.
For those of you who don't know who I am, I am the options instructor here at top Trading Pros and it is my sole job to teach everybody how to trade options in themarkets effectively and with the right strategy based on what's going on in the markets. There is so much garbage out there on YouTube about one strategy or two strategies or oh, you only need a little bit money in your account to become a millionaire and blah, blah, blah. And it really gets my blood boiled because I've been doing this for over now two and a half decades.
I've worked on Wall street for over two decades. I've traded my own capital since then. And what really bothers me the most is when people think that this is just some get rich quick scheme options trading, like anything in life, requires dedication, discipline, practice and time.
If you really, really want to learn this skill, I encourage you to click and subscribe to this channel like this video and I'll keep producing more as well as check out our website, toptradingpros.com. I have a free ebook you can download to learn my strategies and to learn some of the logic behind how I set up my trades. And also we offer coaching, discord as well as trade alerts and a newsletter.
So these are all the things that we offer at top trading Pros. So please check us out when you get a moment. But what I'm going to talk about today, the reason for this video is a very simple income generating strategy.
A lot of times we talk about trading and about shorter term strategies, but sometimes there are just times in the market when it doesn't make sense to do that. Or you also want to have maybe a slower paced income generating strategy that's kind of working in the background. And that's what I'm going to talk about today.
There's a strategy called the poor man's covered call. It's a really cool strategy. I didn't make up the name and I'll explain to you why it's called the poor man's covered call in a second, but I'm going to jump right into it.
Now, the best way to kind of talk about this is to show you a live example. And that is what I'm going to do today. So without further ado, let me share my screen with you here.
I'm going to jump right into it. And what I did was I picked just a name. Now, there are rules.
So like I said, if you want to learn how to do this strategy the correct way, and you want to learn a little bit more, please check out our website, toptradingpros.com. But I'm going to show you just the basics on how this works. You generally want to pick a stock that is well known.
John Napolitano: Options Trader
Support: [email protected]
Disclaimer:
https://toptradingpros.com/disclaimer/
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Trading Options: One Simple Income Strategy
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