Part 3/9:
David first dipped his toes into options trading in 2019, initially fearful of its complexities. A conversation with a fellow trader on Twitter, however, encouraged him to take the plunge. This dialogue catalyzed his understanding of options trading, leading him to see selling options as an opportunity to become “the house” in a casino, rather than a gambler at the table.
Demystifying Cover Calls
When David started selling cover calls, his initial experiences ranged from gaining small profits to lucrative weeks that saw massive returns. The core idea behind selling a covered call is simple: he sells the right to someone else to purchase his shares at a specified price by a certain date—generating income upfront while still holding onto potential asset appreciation.