Two Exit Strategies for Poor Man’s Covered Calls

John details two primary exit strategies for managing Poor Man’s Covered Calls (PMCCs). These strategies address both scenarios: when the underlying stock moves against your bullish position (downward price movement) and when it performs exceptionally well, exceeding your anticipated gains…

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Criteria for PMCC Candidates: Poor Man’s Covered Calls

John outlines specific criteria for selecting stocks suitable for the Poor Man’s Covered Call (PMCC) strategy. While he acknowledges that Nvidia, the stock mentioned in Angelica’s question, exhibits an uptrend and appears promising, he reveals that he personally wouldn’t have chosen it for…

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Optimal Trade Management and Risk Assessment

The optimal approach to trade management and risk assessment involves understanding the type of trade you are making, committing to a strategy, and adjusting your approach based on market conditions.

Identify your trading strategy: Determine if you are trading based on order flow or…

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Main Themes

1. Importance of Pauses and Optimal Entries

Pete consistently emphasizes the importance of pauses in a stock’s upward movement. They argue that chasing a stock that has already experienced a significant rally without a meaningful pause often leads to suboptimal entries with a less favorable risk/reward ratio.

Examples: Pete cites SNOW…

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Stocks Discussed

ONON: This stock is in a strong retail group and has a perfect setup. It has had a good push with decreasing volume, holding well since earnings came out. The monthly chart is at all-time highs. The average true moves have decent volatility. The consumer cyclical and retail apparel and footwear sectors are strong.

SQ (Block…

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Key Ideas:

Light Volume: Market hit new highs on Friday but with light volume, potentially signaling a need for a pause or pullback.

Importance of Pauses: Many stocks discussed haven’t experienced meaningful pauses, potentially leading to late entries with unfavorable risk/reward.

Average True Range (ATR) Analysis: ATR is crucial for…

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