Nick and Mike discuss the recent weaknesses in the markets and the increased volatility. They talk about their own trading activities, including closing out a MARA covered call position and making adjustments to a coin position. They also mention the current market conditions and the performance of different stocks and indices.
They then focus on their trading strategy for the day, called the wheel strategy. They explain that this strategy involves selling a put option to obtain 100 shares of stock at a lower cost basis than the current market price. They then convert it into a covered call position. They emphasize the benefits of this strategy, such as collecting premium on both sides of the market, profiting from a range-bound or slightly lower stock price, and reducing overall basis on the position. However, they also mention that one trade-off of this strategy is giving up the potential for unlimited upside profit.
Throughout their conversation, they invite viewers to join them on YouTube for live chat and mention the tastylive News & Insights blog. They answer questions from the chat about various trading strategies and specific stocks. They also discuss their trading plans for the future.
They briefly touch on other trading strategies, such as bear put spreads and collars, as alternative variations of the wheel strategy. They emphasize the importance of understanding the Greeks and their impact on options trading. They mention the availability of resources on the tastylive site.
The hosts also discuss different scenarios for managing trading positions, such as timing for rolling options contracts and the best stocks or indices for implementing the wheel strategy. They explain the concept of extrinsic value and how it can be used to shift positions in time.
They briefly mention the recent market performance and upcoming earnings announcements, as well as the use of futures and ETFs in getting long the S&Ps.
Tune in for more and a live Q&A session as well!