Paid Daily · Resources · Ask Plutus
Tom Preston Says Sell Calls Below Your Cost Basis, Here's Why
NowPress play to follow along0:00 / 6:19
Chapters4 segments · tap to seek
ticker lesson
Breakdown
0:01lesson
Selling out-of-the-money put to buy stock at lower price
- Selling out-of-the-money put to buy stock at lower price
- Keep premium if stock rises
- Assigned long shares if stock drops
- Cost basis is strike price minus credit received
2:13lesson
Wheel strategy: selling put and calls against stock
- Sell put to enter stock position
- Sell calls against stock to reduce cost basis
- Wheel strategy involves selling put and calls
- Cost basis reduced by premium received
4:26lesson
Selling calls below cost basis to reduce loss
- Sell calls below cost basis to reduce loss
- Premium reduces cost basis
- Even if stock rallies, still sell call
- Loss is mitigated by premium
4:27lesson
Mitigating loss by selling calls below cost basis
- Selling calls reduces loss even if stock rallies
- Loss is better than higher loss
- Premium reduces cost basis
- Trader chooses whether to sell call
Informational only — this is tastylive’s content, decoded by Plutus. Not Paid Daily’s advice or a recommendation. The outline, timestamps, and claims are extracted from what the creator said; verify before acting.