Weekly Stock Scan: How To Find The Best Stocks for Cash Secured Puts and Covered Calls

Summary

In this video, the host provides a weekly update on high-volatility stocks in the S&P 500, focusing on those that offer the highest premiums for cash-secured puts and covered calls. Using ThinkorSwim, the host highlights stocks like Super Micro Computer, Moderna, Tesla, and Enphase, analyzing their implied volatility and potential returns from specific options strategies. Viewers are introduced to a custom 'percentage premium' column for evaluating trade profitability, with actionable insights on how to identify profitable options in a volatile market.

Takeaways

• 😀 The video focuses on stocks with the highest implied volatility, which are ideal for selling covered calls and cash-secured puts.
• 😀 The scan is conducted using the ThinkorSwim platform, specifically looking at the S&P 500 stocks sorted by implied volatility.
• 😀 The highest implied volatility stocks are listed at the top of the scan, providing opportunities for higher premiums.
• 😀 The script emphasizes the importance of understanding cash-secured puts and covered calls, and links to resources for beginners.
• 😀 Super Micro Computer is highlighted as a stock with 83% implied volatility, making it a high-potential candidate for options strategies.
• 😀 Moderna is also discussed, with a current price of $73 and an implied volatility of 66%. The video explores its premiums for both cash-secured puts and covered calls.
• 😀 The 'percentage premium' column in ThinkorSwim is a custom feature that calculates the potential profit based on premium and risk involved in options trades.
• 😀 Cash-secured puts are explained, with an example of the $66 strike price for Moderna, offering about 1% profit, requiring $6,600 for 100 shares.
• 😀 Covered calls are also explored, with Moderna's $74 strike price yielding a 3.76% profit in 8 days, based on the current price of $73.
• 😀 Tesla is analyzed as a higher-priced stock ($230), with an implied volatility of 64%, and potential profits for both cash-secured puts and covered calls.
• 😀 Enphase Energy is discussed as a potential stock with 62% implied volatility, showing a 1.21% profit for cash-secured puts at the $104 strike price.
• 😀 The video encourages viewers to pause and review the list of S&P 500 stocks sorted by implied volatility for more potential opportunities.
• 😀 Viewers are reminded to like, subscribe, and comment with any questions, as the channel provides further content related to options trading and market analysis.

Q & A

What is the focus of this video?

The video focuses on analyzing high volatility stocks in the S&P 500 and reviewing the premiums paid for covered calls and cash-secured puts on these stocks.

How does the host scan for high volatility stocks?

The host uses the ThinkOrSwim platform's scan tab, sorting stocks by the highest implied volatility in the S&P 500. The list is presented with the highest implied volatility at the top, descending from there.

What does the 'percentage premium' column in the trading platform calculate?

The 'percentage premium' column calculates the percentage profit for selling a cash-secured put or covered call at a specific strike price. It factors in the premium collected and the risk if the position is assigned.

How are the premiums for cash-secured puts and covered calls calculated?

The premiums for cash-secured puts are calculated based on the strike price and the premium collected, while the risk is determined by the amount needed to buy 100 shares if assigned. For covered calls, the premium is based on the strike price of the call sold, with the potential return calculated as a percentage of the stock price.

What is the current implied volatility of Super Micro Computer and why is it notable?

Super Micro Computer has an implied volatility of 83%, which is the highest in the S&P 500 for this week. This high volatility makes it an attractive candidate for options trading, especially for cash-secured puts and covered calls.

What is the expected premium for selling a $66 cash-secured put on Moderna?

By selling a $66 cash-secured put on Moderna, the premium collected is expected to be between $60 and $65, yielding a 1% return on the risked capital of $6,600.

How much premium can you collect from selling a covered call on Moderna?

If you buy 100 shares of Moderna at $73, you can sell a $74 covered call and collect about $272 in premium, which corresponds to a 3.76% return over 8 days.

What is the risk involved when selling a cash-secured put on Tesla?

The risk involved when selling a $215 cash-secured put on Tesla is the need to have $21,500 available to purchase 100 shares if the position is assigned.

What is the expected premium for selling a cash-secured put on Enphase Energy?

By selling a $104 cash-secured put on Enphase Energy, the premium collected is expected to be between $105 and $147, with an approximate 1.21% return, depending on market conditions.

What is the difference in risk and reward between cash-secured puts and covered calls?

The main difference is that cash-secured puts carry the risk of having to buy the underlying stock at the strike price if assigned, while covered calls limit the upside potential of the stock since the shares could be called away at the strike price. However, covered calls generally provide higher premiums.