Episode 128: How I Made $616 in 5 Minutes (And You Can, Too) – A Covered Call Options Case Study

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After our recent episode exposing how a simple covered call options strategy could create some additional income in your Canadian investment portfolio, you might be wondering what it could look like in practice. 


In this episode, we walk through an actual covered call option scenario step by step to show you how selling at-the-money options can pad your bottom line with extra premium while offering some strategies to adjust trades when the stock price moves against you. Whether you’re looking to use covered call options to protect against a market downturn or capture steady returns from shares you already own in your Canadian portfolio, knowing how to navigate each possible outcome is key to feeling confident about every covered call options trade you enter.

By digging into real numbers and real time-stamped events, you’ll discover what happens when your covered call option expires worthless, what it means if your covered call option expires “in the money” and your shares are “called away,” and you’ll learn how rolling an in-the-money covered call option can create even more income from the added extrinsic or time value. This deep dive transforms theory into practice so you can decide if a covered call options strategy is the right fit for your Canadian financial freedom goals.

What you’ll learn:

  • Experience a step-by-step breakdown of a live covered call options trade using the Nasdaq 100 ETF, ticker QQQ;
  • Understand how and why you’d roll an in-the-money covered call option to keep your shares and earn additional premium; and,
  • Gain confidence in handling each outcome—from worthless covered call option expirations to assigned shares—so you can build a more resilient Canadian investment portfolio.

Press play now to discover how a single covered call options trade can reshape your approach to generating extra income from the shares you already own.

Resources:

Calling All Canadian Incorporated Business Owners & Investors:

Consider reaching out to Kyle if you’ve been…

  • …taking a salary with a goal of stuffing RRSPs;
  • …investing inside your corporation without a passive income tax minimization strategy;
  • …letting a large sum of liquid assets sit in low interest earning savings accounts;
  • …investing corporate dollars into GICs, dividend stocks/funds, or other investments attracting cordporate passive income taxes at greater than 50%; or,
  • …wondering whether your current corporate wealth management strategy is optimal for your specific situation.

Achieving financial independence retire early (FIRE) requires smart planning, especially when it comes to growing your net worth and generating passive income with a focus on the sequence of returns of your Canadian investment portfolio. In this episode, we focus on using a simple covered call options strategy to earn weekly or monthly income on your Canadian stock portfolio. For business owners, navigating the complexities of corporate structures, tax implications, and investment strategies can feel overwhelming. From understanding capital gains rules to leveraging life insurance for wealth optimization, the right approach can transform your financial future. By aligning your strategy with tax-efficient tools, you can unlock the full potential of your business and investments, ensuring sustainable growth and long-term independence.

Transcript:

Have you ever wondered how a covered call trade really plays out from start to finish? In this episode, I’ll walk you through a live scenario on the QQQ ETF. That’s right, that’s the NASDAQ 100 ETF. We’re gonna be buying 100 shares, then immediately selling an at the money covered call. Specifically, you’ll get the answer to these three big questions. What happens if the call expires worthless?

 

What happens if the call goes in the money? That means that the queues actually rise in price above the strike price of the option that we’ve sold, and your shares are assigned, or as some call it, called away. And is there any way to keep your shares and continue to make money on those shares, even though the underlying stock has blown through your strike price and your covered call is ready to expire in the money?

 

Stick around because in the end, you’ll know exactly how each of these scenarios can play out so that you can handle the various outcomes that are sure to come your way, just like a pro. Here we go. All right, so we’re gonna be digging in here and this particular episode is focused on building on the last episode on options, which I believe was episode 126.

 

So a couple episodes ago today, this is 128. And we’ve received a lot of positive feedback. A lot of people are saying, wait a second, I have ETFs or I have stocks. And the idea of earning income has sort of intrigued them when they have these stocks sort of sitting there. And of course, ETFs, many ETFs anyway, have little dividends or maybe even no dividends.

 

But you that’s not really why you have them. So for example, the Nasdaq 100 is a tech focused ETF. So we’re looking at all the big tech, right? So you’ve got big tech like Apple in there. You’ve got, you know, Nvidia, you’ve got Amazon, you’ve got Tesla, you’ve got all these tech companies. There’s the top 100 are in this ETF, which provides you some great diversification.

 

but like you might have recognized, when we buy this ETF, we’re sort of buying it, holding it, and just sort of waiting and seeing what will happen. We know in the long run, the market typically moves up, so it’s definitely a positive move. Now this is not the SPY. The SPY is the S &P 500 ETF. SPY is sort of an easy way for you to buy all 500 companies. However, note that

 

Some companies are weighted more than others. So based on market cap as well. we’re not suggesting that you pick the cues, but because I had a trade on with the cues this week, I thought I would share a scenario with you. Okay. And I tried to map this out so that we can make this as clear as possible. full disclosure, this is not my actual trade. This is a trade that you could have made.

 

this particular week as I’m recording this episode, OK? And we’re actually only going to look at a very short time period for this particular trade. really, what I want to give you is I want to give you an opportunity to kind of see, how does this look, right? So we were talking. It’s great. It sounds great. Can we earn income on our stocks through a covered call? Amazing. What’s the downside, right? Because there are some downsides, as we discussed in the previous episode. We talked about this idea that

 

You’re kind of capping your upside on the actual appreciation of the stock. So you can do one of two things. If it does work through your strike price, so if that stock value, in this case, if the Q’s pushes through the strike price of your covered call, you can just sit on your hands and wait for it to be assigned or have those stocks called away. And then you’ll get all that capital back. And then you get to rinse and repeat. You can like go and like.

 

buy the cues again if you want to and start selling covered calls on that again. So today what I’m really going to be focusing on is just kind of giving you some insight into how covered calls can give you sort of a different view on your stock portfolio. I’m not here to recommend what you do. I’m not here to tell you that this is the only way to go. I’m just telling you that this is a way and it’s something that might be worth looking into further.

 

So we’ll look into a specific scenario with you here today. So first off, I’m gonna be sharing the screen. I’m do my best here to make sure that folks who are listening on the podcast instead of on YouTube so that you can actually see what’s going on here. But I’m gonna go ahead and share this screen here just to give people a heads up as to what this might look like and sound like.

 

In today’s discussion, we’re actually using real numbers based on kind of what’s been happening this week and specifically on Tuesday, January 14th. This is 2025 again that the actual timing doesn’t really matter. But if you wanted to go back and sort of check the charts, you’ll see that like these numbers are real. So on Tuesday we’re going to buy and again I did not buy the cues on Tuesday actually had the cues from a previous trade. You know a few months back so.

 

This is not something I had to do, but I wanted to show you if I did decide on Tuesday to purchase 100 shares, that’s one of the caveats we discussed in the last episode is that you can sell a covered call on 100 shares. So one covered call contract is controlling 100 shares. So this gets kind of pricey. Like this isn’t easy to do on a stock like or an ETF like the queues where

 

it was trading at $505 because now you’re talking about a $50,000 investment, $50,500 you need in order to buy a hundred shares of the Q’s. Now, you can do this with other stocks as well, right? Like there’s some people right now that are in crypto mania and they’re, you know, they like Mara or they like HUT or they like some of these other stocks out there. Now, you know, full disclosure, we have done a whole lot less of individual trading.

 

just because I don’t know if you remember 2021 where every stock was doing great. Everybody thought they were a trader and then we experienced a big downturn. Well, guess what? You know, did that Mara stock look so good in your portfolio when it was worth, you know, 30 % of its original value, right? So you just have to be cautious. You don’t want to go blind into this and just pick anything, right? But the reason I tell you that is that cheaper stocks mean

 

a cheaper amount of capital required here, right? So if I picked something that was a $30 stock, right? 100 shares of $30 stock is only going to be $3,000, right? And then you can sell covered calls on that. Now the nuance is when you do sell covered calls, know, things are relative, right? More risky stocks are gonna have a higher premium amount. Lower risk stocks are gonna have a lower premium amount. So you’re gonna find that if you go and

 

You know, you like Enbridge because Enbridge is a great dividend stock. And it’s pretty steady, Freddie. It’s not like up and down and all over the place. Well, guess what? Your options premium is going to be a whole lot less on a stock like that. However, it actually might lend itself more to a strategy like this, where your goal is that, hey, listen, if I get assigned and the shares are called away, I just go ahead and buy the shares again. So there’s all kinds of ways to do this. But today, we’re going to look at the cues.

 

purchased 100 shares for $505. So $50,500 have been purchased. For those who are familiar with stock options, you might be like, oh, I’ll just do a synthetic or something like that. Yes, we’re hoping to get deeper into some of these ideas as we move along here, but we’re going to start with the basic here, like super basic, something that pretty much anybody could do if they chose.

 

So we’ve got these stocks. These are now in our account. So we own these shares. We are in full control of them. And what we’re going to do, and I’m doing this right away. Now, there’s some people that would say, well, don’t sell your short position right away. Why? Well, normally I try to buy when there’s a bit of a dip. So why not wait for the shares to come back a little before you sell your covered call? So I’m not going to talk to you about strategy of like, you know.

 

how to maximize here. just wanna show you that, if you bought the shares and then immediately after on the 14th, if you sold a covered call, right? So you’re selling this call option to someone out there. Somebody out there is gambling by taking the call option from you. You’re gonna sell it to them for a cost. They’re gonna give you money in order to essentially hold control of your shares until expiry. And I just wanna highlight here.

 

This is Tuesday the 14th when or if you sell the 505 strike price. So I bought it for 505 and you sold the 505. Okay, so that is at the money that is right at the money there. Someone was willing to on Tuesday to pay you $6 and 16 cents. Now some people are like, wait a second, is that like, you know, how do you know that? Well, you can actually go back and you can look at option premium.

 

Now, because I started setting up this episode on Tuesday the 14th, I basically took that price, threw it down so I could see it. But if you go to barchart.com, you can kind of play with options, chains, and you can kind of explore there. There’s a lot of great information there. And that’s where I took the rest of the information from here to map this out for you. So we’ve got a 505.

 

covered call that we’re going to sell for $6 and 16 cents. Now, some people are like, that’s not a lot of income on $50,000. Well, you’re right, because that $6 and 16 cents is how much they’re paying to control each and every one of your stock. So every individual stock is going to get $6 and 16 cents for the right. Now we’re doing it in one contract, which means we have to, or they have to control a hundred shares of mine.

 

which means that $6.16 is really $616. Now, once again, some people are like, OK, $616 on $50,000 isn’t that much income here. know, like Kyle, you might turn it off right now. But I want you to look at when this option expires. And I did this intentionally, because the shorter the time frame, the easier it is for me to kind of map this out for you.

 

This is a option that expires on January 17th, on Friday, January 17th. So you sold the option on the 14th on Tuesday. This person has only a handful of days till the Friday the 17th for the stock to go up or down. And if it goes down, then it will expire worthless. So basically it’s a coin flip. If you sell this call option at the money,

 

It has what they call a delta of 50 % because 50 % of the time we expect it to go up and 50 % of the time we expect it to go down, right? So you’re pretty much at a coin flip right now as to whether you’re going to win or lose. So I want you to pause for a second. You’ve got three days. Someone’s giving you $616 in order to flip a coin with you so that they can take the cues from you. Now here’s the thing. Like we’re not talking about this isn’t your first born, OK?

 

So it can be really hard. Like FOMO is a real thing, right? But like, I want you to remember that like if someone takes your shares, you can buy more. There is like an endless supply. Now, the hard part is, is whether you’ll be happy to buy them at whatever the price is or not, right? So it’s easier to do this strategy than say a rent to own where you’re giving someone the option to take a property from you. like,

 

You know, over time that property, you know, might appreciate more than you thought and so forth. And you put so much love, care and effort into it. You might go, shoot, I wish I never did that. Well here the same feeling comes, but I just want to remind you that if someone takes your shares, you will get your five five back because you bought or you sold, should say a covered call at $505. So basically you’re saying, listen, if, if it goes through the strike price, I’m going to get all my money back from the, cues.

 

And I get to keep this $616 as profit for a three-day trade. So I want to just flip to the next screen here. And I want to share what happens in the scenario where it expires worthless. So let’s fast forward to Friday. Now, I have no idea what’s going to happen. I’m actually recording this on Thursday the 16th. So I don’t know what’s going to happen tomorrow. But what I do know happened yesterday is the CPI data came out.

 

And the Q’s actually like jumped by like $11. So we’ll talk about that because that’s really what’s happening. But let’s pretend by tomorrow, Friday, the end of day, 4pm, when the market closes, the Q’s are at exactly 505. Okay, so you bought it at 505 on Tuesday, you’re gonna basically close on Friday at 505. Basically, what’s gonna end up happening is one of two things is gonna happen.

 

Okay, now if you actually let this thing expire, the actual call they your shares would be called for 505, right? And actually, I’ve never had it happen right on the money here, like right on the, you know, on the dollar. So technically, they could they could take your shares at 505. And, you know, you’re left with nothing. Now, what I think would more likely happen is you probably just buy back this, this option, because the option is going to lose value.

 

We’ll talk about that in one of the other scenarios. But let’s just assume that this person’s like, yep, I paid $616 to own this at 505, and it ended up being worth 505 by the end of the three days, and I’m going to take it for 505. So technically, you now have your money back in your account. You have no money in the trade in terms of the base position, which is the cues. And your actual

 

option that you’d sold, it was worth 6 16 on Tuesday, but each day, if it stayed at five five every single day, now I’ve never, that would never happen. Of course, right. They were talking about sort of an improbable scenario, but let’s pretend it did. It stayed at five five Tuesday, Wednesday, Thursday, Friday. What’s happening to the option is it’s becoming less and less valuable. Why? Because there’s less time in order for that.

 

for that stock to do something, right? So basically, that 616, like by Wednesday, if it’s still at 505, it’s going to be worth less. By Thursday, it’s worth less even still. And it’s actually going to be more aggressively. It’s going to increasingly be worth less, meaning it’s going to almost, you know, it’s going to actually, you know, almost like this exponential idea towards zero, though, right? And it’s going to aggressively get towards zero. So ultimately, by like the moment before the market closes,

 

this thing’s gonna be worth $0. So your $6.16 that you earned per share is now worth $0. So like before it closes, if you wanted to keep the shares or you wanted to guarantee that you’d keep the shares, you could just buy it back for like a penny or, you know, five cents or something like that. Now that’s five cents per share, right? So there’s a cost to that, right? So it would be, you know, five cents, you’d end up.

 

you know, multiplying that by a hundred, right? So you just kind of think about, you know, whether it’s worth it to you or not, just to kind of wrap up the trade or not, or you just let it expire and just see what happens, right? Sometimes right at the end, at the close, there’s a bump up in the market and so forth. So in this case, you’ve earned $616 in three days, which again, I’m not denying, like that’s not a lot of money compared to the money that you had at stake $50,000. However,

 

That’s a 1.22 % return. When we annualize that, that’s like 148%. OK, now is it realistic that you’d be able to do this every three days consistently? And keep in mind, you actually could try. You could keep it three day gaps. But most stocks trade either monthly or weekly. But some of the bigger ones, like the Qs, some of these ETFs will actually trade on like a daily or an every other day schedule.

 

So like you could do really short term trades, right? So you could keep, essentially it’s kind of like keeping things tight so that the stock can’t sort of get away from you too, you know, too far. So I tend to keep things about a week out, two weeks out. Some people do monthly, it’s totally up to you, but we’re just showing this very short trade that obviously if you could repeat, you’re gonna walk away with some profit here on a three day trade, right? Now let’s talk about.

 

if it expires worthless, cause the stock went down. Cause like in this scenario, like, man, like I’m going to do this every day all day long, right? That’s great. But here’s the thing though. The reality is, is like, it’s probably the stocks either going to go up from five five or it’s going to go down from five five. So let’s talk about like what happens if, if it expires on Friday the 17th and the stock is now worth five four. So it’s actually lost a dollar. Well,

 

You can see here in the spreadsheet, we’re at losing $100 on the base position, right? So like if you were to sell, even though the option’s gonna expire worthless, right? If the option expires worthless, but let’s say you were like, I just wanna wrap up this trade, I don’t wanna own the Q’s anymore, you could sell them back to the market, you’re at $100 loss. So whether you realize that loss by selling or whether it’s an unrealized loss by holding, you’re now

 

negative $100 on the base position. You bought at 505, you’re selling at 504, or at least it’s worth 504. However, your option expired worthless at the end of Friday. So since you paid or you were paid $616, your $616 now, you have a net profit or a total profit on this trade of about 516 by the end of day Friday.

 

Why is that? Well, the stock’s worth a dollar less, but because you sold a covered call, you made 616. So the difference between those two is going to be 516. Makes sense? So that is sort of a risk that we have. Like if this thing expires worthless, $6 lower. So now it’s like it’s closing at $499. So you bought at 505, it’s closing at 499. Technically on paper,

 

you are $600 underwater with your Q’s base position. So whether you, if you sell it, you’re, you’re crystallizing that $600 loss. If you keep it, you’re still negative $600 on this position, right? Like that’s where you are in the portfolio. However, because you sold this covered call for 616, you’re actually at a $16 profit. So why I picked $6 was to make this really clear to you that, you know,

 

It basically is creating you a little bit of downside protection at the same time. You know me, I am a very, very cautious individual. I’ve done some dumb things. Don’t get me wrong. I’ve done some risky things that maybe at the time I didn’t think were that risky. But I try to seek consistency. I try to seek protection. So this is one of those ways where you’re of like protected to the downside. And now,

 

You basically are at a place where it’s like, hey, if you wanted to, the very next week, you could sell a covered call at the money, 499, to repeat the process. Because why? Well, you’re still technically in a profit. You’re $16 of profit in your pocket. If the queues continue to go down next week, you will have more downside protection, right? So you can kind of see here, if you’re tracking this,

 

that you’re actually creating yourself a little bit of protection from who knows what the market might do. The real goal here though is that over time that you make sure you’re keeping track of things. Cause I don’t want, you know, I don’t want this to take a sharp nose dive and then sell, you know, sell covered calls at the money and then it takes off from you. Now it’s like you lost your shares for a big loss. You made some premium along the way, but you could be at a net negative if you’re not paying attention, right? So you want to be paying attention here.

 

and don’t just aimlessly do this strategy. All right, let’s talk a little bit about if this expired in the money a little bit, okay? So if we go in the money by a dollar, all right? And I think that in the money by the dollar is right here. So if I look at expiring in the money by a dollar, basically what’s gonna happen is,

 

The numbers are going to look very similar to our very first scenario, right? So even though it’s in the money by a dollar, that means the stocks trading at 506. If you don’t buy back the actual call before the end of the day on Friday the 17th, what’s going to happen is they’re going to take your shares and they’re going to pay you 505 for every share. So you don’t get any of that dollar upside, but you still get to keep the 616.

 

So your total profit here is 616 again, even though the stock went through your strike price, right? So right now you’re going, that’s not that bad, right? Like that’s not that bad at all. It’s like I’ve actually earned more on this by Friday, except they’ve now taken my share. So I either have to rebuy the shares if I want to go, or I have to maybe put it in a different equity. It’s totally up to you what you choose to do. But you still have

 

$616 sorry $616 of profit in that case. Now let’s look at what happens if we buy this thing back. If we buy back the call, we’re looking at this here and we go, well, what we’re trying to do is we’re trying to keep the shares. So I’m gonna buy back my call, but you’ll notice that it’s gonna be worth less. And I’m gonna pretend for a second here that you buy it back like.

 

a second before the market closes. Now I would never recommend doing that because that’s going to be way too close. But why I’m saying a second before it closes, because what I can tell you is that at the moment before it’s closing, before the market’s closing, basically that 6 16 call that you sold sold. So you sold $6 and 16 cents. It’s only going to be worth about $1 at that point. Why? Well, because

 

there’s only a dollar arbitrage between what the queues are trading at, 506, and where it is, 505. There’s a dollar difference there. So that option right before expiry is pretty much worth only a dollar. There’s no extrinsic value there. There’s no time premium left for someone to earn, right? So it might be.

 

you know, a dollar five or something. You know what I mean? Like there’s somebody out there trying to make a little bit of money, right? The market makers are trying to make a little money, but it’s going to be at about a buck, right? And basically what that means is, is that you’re going to keep your shares, which are now worth a hundred dollars more than you bought them for, but you’re giving back a hundred dollars to buy back your contract, your covered call, right? You got six 16 for every share.

 

Now you’re paying a dollar for every share. So that $616 is reduced by a hundred and you get 516. What you’re gonna notice is your profits the same again, right? Look at me, I’m trying to plan ahead here and give you some scenarios to kind of show you how this might play out. Now these are, you know, feel like fairly perfect world scenarios. What I wanna show you is what really happened yesterday. So this is on Wednesday, January 15th, the CPI numbers came back and they were

 

better than anticipated slightly. So the market liked that and the long bond market seemed to like that too, cause a bond rates were going up up until this point, the market was a little shaky. And at least yesterday, what ended up happening is the queues jumped up to five, 16 and 70 cents. So that’s like, it went through the strike price by $11 and 87 cents, $11 and 87 cents. So that’s like not

 

super awesome. And basically what I wanted to show you here is that by Wednesday, there’s two things that we could do. Like we could say, my gosh, I have FOMO now and I want to make sure that I keep these cues now somehow. Like what would happen if I wanted to keep the cues? Well, what I would do is if let’s say that this happened and I wanted to buy this back, I looked yesterday at what it would cost to buy back the actual

 

premium. Now the stock went up $11 and 70 cents above the strike price, but to buy back the option, it only costs $11 and 87 cents. So why I’m telling you that is like you’re looking at it you go, Oh my gosh, like if I want to buy this back, I have to pay almost double what I sold it for.

 

which doesn’t feel logical, right? Like you’re like, I don’t wanna lose money, right? You can see here, it’s like, if I pay $1,187, I’m gonna lose $571 in order to do this. You know, like, oh my gosh, like that’s really crazy. Like, why would anyone do that? Well, you would have received $1,170 of upside on the cues, right? Because that’s how far…

 

it went through the strike price. Now, I’m not advocating that you do this because again, I could always buy more cues if someone takes them from me. So I’m not gonna do this, but I just wanna show you the math behind it so that you go and you look and you go, you still have a profit of $599 should you have chosen to do that yesterday. So if you were like, I regret selling the covered call and you know, now I just wanna keep my, you know, my stock and blah, blah. It’s like you’re 616,

 

basically got reduced by a total of about $17. Now you’re at $5.99 of profit based on the growth of the stock that you’re holding. But I’ll be honest and say, this, in my opinion, is actually the riskier option to take, right? Because what happens if the day after it comes down again? If it comes down again, now you have no risk.

 

protection, like you have no downside risk protection by having that covered call in place, right? So what you’ve done is you’re paying this large amount of money. It’s almost like you’re real, without realizing the gain in the cues, you’re gonna pay it out of pocket in order to keep this unrealized gain in the cues. Not my thing, but it might be your thing. So that’s not what I’m gonna do, but maybe you would, and I just wanna show what that looks like. So instead,

 

What I would probably do is just let this thing expire in the money if you were, I’ll actually explain what I would do. I wouldn’t let it expire in the money necessarily, but if you did, you’d walk away with your 616 of profit. Somebody else is gonna walk away with a large profit right on the covered call because they bought it from you and the payoff, you know, the bet worked for them. So they’ve got a nice upside there. They’re gonna have probably over $1,000 of profit there.

 

But you’re gonna still have your 616 and you’re gonna get your 50,500 back. And then you get to rinse and repeat and decide, hey, what do I do from here? But what I would rather do, and this is what I typically do, is that I would rather roll my option. All right, so what I have here is basically instead of selling the stock on the Friday and basically just getting my $50,000 back,

 

I’d rather keep the cues and sell more options on it. And you might be like, well, Kyle, how do you do that? Well, I just showed you a few minutes so you can buy your call back. So people in the trading world would call this rolling your option. I can roll the option to a further out expiry. And that’s actually what I’m showing you I’ll do here. So let’s pretend that this thing on Friday, just before close.

 

You know, the stock’s still up $11.70 above my strike price. So it’s gonna cost me about $11.70 to buy that back near the end of the day. Well, I can do that. And at the same time, I can sell another call a week out. Now I’m gonna go from instead of the 17th, this is gonna be the 24th. So a full week out. And I’m actually gonna keep the strike price the same, 505. And you’ll notice that I can sell it for $13.80.

 

So my net benefit here is 826. When I consider the 616 I sold, the 1170 that I had to pay to buy it back, and then I made another 1380 on this trade. So my 616 profit went up to 826, and I get to hold the queues for another week, right? And we get to do it all over again. Now, some people might say, Kyle, listen.

 

Well, like eventually, like 505 is going to be an irrelevant strike price if let’s say it just keeps going up and up and up. And you’re absolutely right. Eventually you might just let it expire and then you start over. You find a place to buy back in and you go again. But other people actually roll up. So what I might choose to do is I go, listen, I want to actually roll this thing up. And I wanted to get to what was the number here? I think I wrote it down incorrectly. I believe it was like 507 50.

 

was the call that I could purchase a week out. And the price of that was just slightly higher than what I had to buy the 505 on the 17th back at. So basically what I’m trying to do is I’m actually trying to push my strike price up and the next call by $2.50. And I’m actually not losing any money by doing so. And you’ll see here the total profit is gonna be about

 

know 875 on this total trade because now we have some unrealized gain in the queues plus we have $625 of option premium. So in today’s discussion, what I’m trying to do by sharing the screen and giving you one scenario is and this went way longer than I anticipated it would. However, it does make sense because there’s so many different options. Hence the name that can happen from one.

 

decision that you make right which kind of raises two flags here right you you’ve been exposed to this idea I wouldn’t recommend anybody to just dig in and you know blindly hop in and start selling calls and not understand what’s going on you know you want to make sure you’re on a good platform to do so there’ll be a link in the show notes if you want to use IBK are which is interactive brokers feel free.

 

You’ll get a bonus. We’ll get some sort of bonus. It’s there just because it’s the platform we use, but sink or swim works or think or swim. I think is the name of it. There’s all kinds of other platforms out there that are helpful. Probably not your straight up big bank platform is going to be super helpful here because you know they might charge a lot to sell or buy a premium contract and so forth. But make sure you know what you’re doing before you dig in on anything. The purpose of this episode is to really

 

just give you a sense of what’s out there. Like what is possible? We receive calls all the time from people who are saying like, they wanna find ways to like be more in control of their financial future. Well, guess what? This is one of those ways, right? I can go and I can set and forget, which is fine. There’s nothing wrong with doing set and forget portfolio. We’re not trying to advocate against that at all. But for those of you,

 

who are trying to figure out like, what can I do? How do I do this better? Is there any opportunity for me to do something and you know, maybe that I was unaware of. And the answer is yes, this is one of those. I would encourage you to do some learning about it. There’s some great books. There’s a book by Lee Lowell. can’t remember the name, but it’s on our book list on Canadianwealthsecrets.com forward slash books. You can go check that out and do some learning, but that’s something that I would definitely encourage you to do.

 

Because here’s the thing, set and forget, it works. It will work. In the long run, it will work. But if you look at an example here, this is the Russell 2000. Russell 2000 ETF, so 2000 small cap companies in the United States that are here. And you’ll see that back in November 2021, it reached an all time high. And if I just did the buy and hold, and let’s say I bought it right at this all time high, it seems to always happen to people, right? They get in right at an all time high.

 

And then boom, things go all the way down. went down over 30 % over the next six months. And then it took another year and a half to get in touch all time highs this past November. And now it’s down again. And actually how much is it down by? Let’s take a look. We’ll measure it up. So from this all time high, it’s now down back to down 9 % again, right? So.

 

These things can happen even with an ETF, right? It’s a small cap ETF. So of course it’s more volatile. But imagine if in between we were to make some income along this journey so that it’s not all dependent on whether the stock price goes up or down or sideways. It’s like you can control a little bit of that because guess what? It is hard to predict what’s gonna happen next. I thought this was a big bear flag here and look, it dropped and it faked us out and then went boom, all the way up.

 

It’s hard to predict what’s gonna happen. So finding ways that you can protect yourself and make some money in the portfolio at the same time without doing anything emotionally charged or too risky can be certainly helpful. One thing I do know for certain is that two podcast episodes will not do the trick to start, but what you can do is start the learning process. So I hope this has been helpful for you. Friends, if you’re an incorporated business owner,

 

This is one of those strategies that can be helpful. You can spend 15 minutes a week or a month doing this. If you trade monthly calls and don’t worry too much about, you know, pick your strategy and move. If you are an incorporated business owner and you are looking for ways to unlock your retained earnings, make sure you sign up for our masterclass over at Canadianwealthsecrets.com forward slash masterclass.

 

It’s completely free. It’s chock full of amazing ideas specifically for business owners for our other friends who are not incorporated. If you filled up your RSP, your tax free savings, and now you’re trying to look to what next Smith maneuver, should I be leveraging, you know, permanent insurance policies, whatever that might be, head on over to Canadian wealth secrets.com forward slash discovery to

book yourself a discovery call so we can try to help you take your next move along your wealth building journey. All right, my friends, it is Kyle for this Friday episode and I’m signing out. I just want to give you a quick reminder that this is not investment advice. It’s for entertainment purposes only. And you should not construe any such information or other material as legal tax investment, financial or other advice.

 

Just a reminder, I am a licensed life and accident and sickness insurance agent and VP of corporate wealth management with the Pan Corp team. That includes corporate advisors and Pan Financial.

Canadian Wealth Secrets is an informative podcast that digs into the intricacies of building a robust portfolio, maximizing dividend returns, the nuances of real estate investment, and the complexities of business finance, while offering expert advice on wealth management, navigating capital gains tax, and understanding the role of financial institutions in personal finance.

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