Ep10 - Jumping into the Deep End of Covered Calls with Russell Rhoads

Episode Summary:

In this special episode, Dan Passarelli is joined by longtime friend and options expert Russell Rhoads—Associate Clinical Professor at Indiana University, former CBOE educator, and seasoned trader. They dive deep into real-world options education, covering everything from teaching college students about derivatives to building structured outcomes with options.

Topics Covered:

• Why concepts matter more than complex math when teaching options
  
  
  
  


• Covered calls and cash-secured puts as strategic investing tools
  
  
  
  


• How to use implied volatility (IV) and the at-the-money straddle for strike selection
  
  
  
  


• Surprising insights from Russell’s backtest on covered call strategies during earnings weeks
  
  
  
  


• The evolving perception of options in retail vs. institutional circles
  
  
  
  


• Understanding the VIX term structure and what today’s flat curve might be signaling
  
  
  
  


• How to “become the issuer” of your own structured product using options
  
  
  
  


• Why selling options—especially in calm markets—can give you the edge
  
  
  
  


• Tips for navigating earnings season with confidence
  
  
  
  

Key Takeaways:

• A consistent covered call strategy can outperform buy-and-hold—especially if you exit during earnings weeks
  
  
  
  


• The at-the-money straddle is a powerful, underused tool for estimating expected moves and timing trades
  
  
  
  


• Retail traders can learn to structure their own risk and reward profiles, just like institutional structured products
  
  
  
  


• The VIX futures term structure reveals market uncertainty—and today's unusual flat curve might be a red flag
  
  
  
  

Guest Bio:

Russell Rhoads is an experienced options educator, researcher, and practitioner. He teaches at Indiana University’s Kelley School of Business and consults with financial exchanges. Previously, he was the Director of Education at the CBOE’s Options Institute.

Resources Mentioned:

• Learn more about Dan: MarketTaker.com
  
  
  
  


• For options disclosures: Characteristics and Risks of Standardized Options (PDF)www.theocc.com/getmedia/a151a9ae-d784-4a15-bdeb-23a029f50b70/riskstoc.pdf
  
  

Subscribe & Review:

Don’t miss the next episode, “Cash-Secured Puts: The Brother from Another Mother” – Subscribe now and leave a review to help grow the Wealth Building With Options community!

Disclosure:

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, investors must read Characteristics and Risks of Standardized Options (ODD) which can be found at https://www.theocc.com/company-information/documents-and-archives/options-disclosure-document

Don’t trade with money you are not prepared to lose. Anything discussed on this show is intended to be generalized information and not intended to be a recommendation to buy or sell any security. The host and guests are not familiar with listeners’ specific situations. For trading information relevant to your specific needs, speak with a licensed broker or advisor.  

Trumpet

Trumpet Fanfare by bevibeldesign -- https://freesound.org/s/350428/ -- License: Creative Commons 0

Wah Wah Wah

Wah wah trumpet failed joke punch line.wav by Doctor_Jekyll -- https://freesound.org/s/240195/ -- License: Attribution 4.0