Most wealthy investors shouldn't sell covered calls. Here's who should.
Covered calls cap your upside, and shares called away in a taxable account can trigger a tax bill you didn't plan for. If you want everything your stocks can give you, keep holding them. For a specific kind of investor, though, this is the right tool — and I'll teach you to run it yourself.
I take a limited number of new reviews each month. Not every portfolio is a fit — I'll tell you honestly.
Private sessions by Zoom, from Hawaiʻi's Big Island.
It works when you have a reason to sell — or a reason not to pay tax on it.
You hold a large position you already plan to trim.
Company stock from your career, an inheritance, one holding that grew too large. Name the price you'd happily sell at, and get paid while you wait for it.
You manage your own IRA.
Inside a retirement account, shares called away don't create a tax bill. The biggest drawback of covered calls disappears.
You're retired and want to stay hands-on.
You ran a business and you read the fine print. You'd rather understand every decision in part of your account than hand all of it off.
I turn applicants away. Here's why.
If any of these describe you, we'll both save time by passing.
- You want someone to manage your account.
- You're looking for fast money or speculation.
- You only want to trade on margin.
- You don't own — or aren't ready to own — at least 100 shares of a company you'd hold for years.
- Your stocks sit in a taxable account with large gains, and a sale would hurt.
“Your advisor runs the core. This is the sleeve you run yourself.”
Most advisors don't write calls on client shares. It's hands-on work, and it doesn't grow a percentage-of-assets fee.
That income is simply left on the table. I teach you to collect it yourself — without selling what you own, and without replacing anyone.
Four steps. You're in control of every one.
Most people never get past the theory. The whole point is that you place the trade — with me beside you the first time.
- 01 — APPLY
A short application
Five minutes. Your main holdings, your account type, and what you hope to get out of it.
- 02 — QUALIFY
I read it personally
If covered calls don't suit your holdings or temperament, I'll say so — and tell you what to come back with.
- 03 — REVIEW
Your Private Review
A working session on your actual positions: which fit, which don't, and what I might do in your shoes.
- 04 — MENTORSHIP
Your first trade, together
Optional. Two one-on-one sessions, 60–90 minutes each: first the mechanics, then your first live trade on your own shares. You press Send.
What you'll need
- At least 100 shares
Of a stock or ETF with a liquid option chain — ideally several positions.
- A brokerage or IRA account
With basic options approval. Covered calls need only the first tier.
- Comfort with the trade-off
Income now in exchange for capped upside — and shares that may be called away.
- A rules-first temperament
Calm and mechanical beats clever. If you want excitement, this isn't it.
The Greeks, volatility and the jargon — in plain English.
Read at your own pace before we talk. Most of it you’ll never need — I’ll show you which parts matter.
The Greeks describe how an option’s price is expected to change. For covered call sellers, only two really matter — Delta and Theta. Gamma and Vega are less critical for a calm, mechanical approach.
Your probability & risk gauge
How much the option moves for every $1 move in the stock. We target ~20 Delta — roughly an 80% chance the call expires worthless. At 20–30 Delta, we roll up and out for a credit.
Your daily paycheck
What the option loses each day to time. Selling a call makes you positive theta — you earn even if the stock doesn’t move. Decay speeds up near expiration, which is why we like 30–45 days.
Volatility
How the price reacts to a 1% change in implied volatility. You’re short vega: a spike can show a temporary paper loss. It’s why we prefer selling when IVR is higher.
Not critical for our style
How fast Delta changes as the stock moves. It matters most for very short-term, at-the-money trades — not for 20 Delta, 30–45+ day covered calls.
Delta tells you where to sell. Theta tells you time is on your side.
You don’t need to memorize every Greek. These two drive almost everything you need to trade covered calls successfully and mechanically.
Where to sell
- A 20 Delta call moves roughly $0.20 when the stock moves $1.
- We target ~20 Delta calls, or near the 1 standard deviation strike.
- That’s roughly an 80% chance of keeping both the premium and your shares.
- As the stock rises, Delta climbs. At 20–30, we roll up and out for a net credit.
Why time is on your side
- Every day that passes, the call you sold loses value — even if the stock doesn’t move.
- Time decay is the main source of profit in covered calls.
- Decay accelerates as expiration nears — why many traders prefer the active 30–45 day style.
Lower Delta = higher probability of success and less chance of early assignment.
Think of implied volatility as the price tag on fear and uncertainty. When investors are nervous, IV rises and option premiums get more expensive — good news when you’re the seller.
Implied Volatility
- The market’s expectation of how much a stock is likely to move over the next year.
- High IV = bigger expected swings, more expensive options.
- Low IV = calmer expected moves, cheaper options.
IV Rank
Where today’s IV sits compared with the past year for that stock.
Great long-term holdings like WMT often trade with low IVR. You collect less per trade, but you’re still paid to wait while owning the stock — and it moves less, so you usually keep your shares.
The call you sold can temporarily gain value and show a paper loss. That’s normal. Volatility tends to settle back down, and you keep most or all of the original premium.
Prefer selling when IVR is above 30% — but the mechanics still work when it isn’t.
The jargon, translated — so it never stops you from starting. Worth knowing as you advance, but you can sell covered calls successfully with a few simple rules and an understanding of Delta and Theta.
Implied volatility drops sharply after a big event like earnings, and option prices collapse. Usually good if you sold.
Near expiration, small stock moves cause big changes in your position’s risk.
Puts usually cost more than calls at the same distance, because investors fear crashes more than rallies.
The stock sits right at your strike at expiration, and you’re unsure whether you’ll be assigned.
The risk of a rare, extreme “black swan” move causing much larger losses than normal.
An advanced measure of how bad losses could get in worst-case scenarios.
Your whole portfolio’s directional exposure, adjusted to how each stock moves against the SPX.
Selling a call without owning the stock. Theoretically unlimited risk.
Selling a put without the cash to buy the stock if assigned. Large but limited risk.
Positive Delta profits when the stock rises. Negative Delta when it falls. Theta is time decay, collected daily.
A peer, not a guru.
Since 1985, I've built businesses and spent a long career in the semiconductor industry. My niche was buying and selling inspection equipment — microscopes and related semiconductor inspection tools. I've worked with hundreds of engineers, and I know they don't trust what they can't explain.
I was also a licensed real estate agent in Hawaiʻi for twelve years (my license is now inactive). Real estate taught me to put every number on the table, answer the hard questions directly, and never ask anyone to take my word for it.
So I only teach what I do myself, every trading day.
I've sold covered calls on my own shares for over ten years. I make many other kinds of trades, but selling covered calls is one of the best ways to earn more on the shares you already own. I'll show you my process and my rules.
What I am, and what I'm not.
I'm a trader who teaches. I'm not a licensed financial advisor, broker, or investment professional, and nothing I share is personal investment advice. I teach the process and rules I use on my own account so you can understand them, test them, and decide for yourself. Options trading involves real risk, including losing money, and past results, mine or anyone else's, don't guarantee future ones. Before you trade, make sure you understand what you're doing and consider talking with a licensed professional about your own situation.
Tell me what you own. I'll tell you honestly whether this is worth your time.
Reviews are by application. I read every application myself and reply personally, usually within two business days.
Fees are discussed once your application is accepted — no obligation until then.
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