Tackle Today: A Cooking Recipe | Tackle Trading
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The word “cash flow” is magical. Some traders, when they hear it the first time, go crazy. “Here, take my money! Teach me how to do it!”
If you are le chef de cuisine in your family, you know that some recipes require precision and others that do not. The Covered Call, if it was a meal, stays right in the middle. It requires some precision but not too much. There is room for flexibility.
Just like beans and meat, covered calls can be cooked with the pot lid closed, like a pressure cooker, or left semi-opened giving the pressure some room to escape. The former is the conventional Covered Call. The latter is the Ratio Covered Call. Here’s how it works:
Conventional Covered Call (pot lid fully closed)
+100 shares of a Tackle 25 stock
-1 OTM Call
At expiration serves 2 profits.
Ratio Covered Call (pot lid semi-opened)
+200 shares of a Tackle 25 stock
-1 OTM Call
At expiration serves 3 profits.
How do you prefer your Covered Calls, Sir/Ma’am?
Tonight’s Cash Flow Club will be, once again, fully dedicated to the Tackle 25 Covered Call system. Be sure to ask Coach Mark how this recipe works.
If you are not a Pro member yet but want to learn how to cook Covered Calls like a real chef, sign up for a 15-day free trial here.
Chart of the Day: Cooking Covered Calls
Video of the day: How to Prepare Covered Calls (with Theta Research Spreadsheet)
Tim, Cody and Noah work through the Tackle Trading Theta research spreadsheet for building out Covered Calls.
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Originally published at https://tackletrading.com on August 1, 2019.
