Wealth Building With Options

Ep8 - They Lied to You! (Not) Why Covered Calls Work

Episode Summary:

In this eye-opening episode, Dan Passarelli challenges the common misconceptions surrounding covered calls. While most traders focus on “why” covered calls work, Dan flips the script and digs into the false narratives and misguided logic that lead investors astray.

Dan explains why some of the most popular justifications for trading covered calls are intellectually lazy—and how overlooking key factors like option pricing models and probability curves can lead to missed opportunities or unnecessary losses.

This episode lays the foundation for next week’s deeper dive into the true reason covered calls work.

Key Takeaways:

• You’ve been misled: Many reasons given for why covered calls "work" are based on flawed logic, not solid data.

• Probability ≠ Profit: High-probability trades don’t always equal good trades—context and pricing matter.

• The 3 flawed logics covered call traders often fall into:

  1. The premium isn’t worth the risk.

  2. Assignment means “losing money.”

  3. Covered calls always add value, so trade them blindly.

• What really matters: Understanding the options pricing model, probability curves, and the indifference point.

• Analogy alert: Dan compares covered calls to buying a car—price must reflect value or the deal isn’t worth it.

• Guest Insight: Henry Schwartz of Cboe Global Markets joins to share data-backed insights into how buy-write strategies are used and who’s trading them.

Featured Concepts:

• Log-normal distribution curves and probability modeling

• Indifference point explained with a $119/$122 call example

• Options pricing mechanics: volatility, time, interest rates

• How pricing impacts strategy effectiveness

Special Offer:

Leave a review for the podcast on Apple Podcasts, Spotify, or your preferred platform.
Then screenshot your review and post it to our Substack or social media with the hashtag #WBWO.
We’ll send you Dan’s Covered Call Strategy Guide PDF—free.

Resources Mentioned:

• Wealth Building With Options on SubStack-https://wealthbuildingwithoptions.substack.com/
• MarketTaker.com – Learn more about Dan Passarelli and his work
• Options Disclosure Document (ODD) – Characteristics and Risks of Standardized Options (https://www.theocc.com/getmedia/a151a9ae-d784-4a15-bdeb-23a029f50b70/riskstoc.pdf)

• Connect with Henry Schwartz and Cboe Global Markets at cboe.com

 

Ep7 - The Future of Options Trading with Fidelity’s Greg Stevens

Episode Summary:

In this special Thought Leader Series episode of Wealth Building with Options, host Dan Passarelli sits down with longtime friend and industry veteran Greg Stevens, Vice President of Options Strategy at Fidelity Investments.

With nearly 30 years of experience across firms like Charles Schwab, the CBOE, and now Fidelity, Greg shares how the options trading landscape has evolved and why education remains the cornerstone of trading success. From the early days of dial-up trading to today's powerful digital platforms, Greg and Dan explore how strategy, risk management, and planning shape trader outcomes.

This episode is packed with real talk on covered calls, cash-secured puts, credit spreads, investor mistakes, how Fidelity supports options traders—and why having a trading plan matters more than ever.

Key Topics Covered:

• Greg’s journey into the options world (and how he was “dragged” in)
  
  
• Why options education is critical in today’s trading environment
  
  
• The evolution of self-directed trading and investor expectations
  
  
• Most popular options strategies among Fidelity clients
  
  
• The real reasons covered calls and cash-secured puts are so popular
  
  
• What separates successful traders from those who struggle
  
  
• Why planning for profits and losses is essential
  
  
• Fidelity’s tools, including commission-free closing of short options under $0.65
  
  
• Greg’s favorite books and movies on trading (hint: Trading Places is a classic)
  
  

Resources Mentioned:

• Characteristics and Risks of Standardized Options (Options Disclosure Document)-https://www.theocc.com/getmedia/a151a9ae-d784-4a15-bdeb-23a029f50b70/riskstoc.pdf
  
  
• Learn more about host Dan Passarelli: www.markettaker.com
  
  
• Books referenced:
  
  
  • Options as a Strategic Investment by Lawrence G. McMillan
    
    
  • Trading Options Greeks by Dan Passarelli
    
    
  • Trading Index Options by Dan Bittman
    
    

Final Takeaway:

“Even a bad plan is better than no plan at all. You can adjust a bad plan—but you can’t fix what doesn’t exist.”

Subscribe & Stay Informed:

If you enjoyed this episode, please subscribe, leave a review, and share it with fellow traders looking to level up their options game. Subscribe on your favorite podcasting platform or on https://wealthbuildingwithoptions.substack.com

Ep6 - How Covered Calls Work

Episode Summary: In this meaty episode of Wealth Building with Options, host Dan Passarelli breaks down one of the most powerful strategies for investors—covered calls. Whether you're a beginner looking to understand the basics or an experienced investor searching for new insights, this episode dives into the mechanics of covered calls, why they work, and how to use them effectively to enhance portfolio performance.

Dan explains the key principles behind covered calls, including risk management, profit potential, and why this strategy remains a staple for successful investors. He also discusses real-world applications, shares a practical covered call example, and introduces the importance of risk graphs (P&L diagrams) for visualizing potential outcomes. Plus, Dan highlights how covered calls can be modified and adapted to fit different investing styles, including conservative long-term wealth-building and active trading approaches.

Key Topics Discussed:

• What is a Covered Call? Breaking down its structure and purpose.
• The Two Components of a Covered Call: Stock ownership and short call options.
• Why Covered Calls Work: How they generate additional income while managing risk.
• Profit & Risk Scenarios: What happens if the stock price rises, falls, or stays flat.
• Real-World Example: Applying covered calls to a hypothetical stock trade.
• Advanced Considerations: Adjusting covered calls, selecting strike prices, and expiration dates.
• Common Mistakes & How to Avoid Them: Ensuring you maximize your covered call returns.

Dan also encourages listeners to help grow the Wealth Building with Options community by leaving a review and subscribing to the show. As a special incentive, listeners who post a review and submit proof on social media with the hashtag #WBWO will receive a free Covered Call Strategy Guide via the podcast’s Substack page.

Exclusive Subscriber Benefits: Paid subscribers receive bonus video content, detailed trade breakdowns, and access to a monthly Ask Me Anything (AMA) session. Join at wealthbuildingwithoptions.substack.com for in-depth resources and direct engagement with Dan and his team.

What’s Next? This episode is the first part of a two-episode series on covered calls. The next installment, Episode 7: Why Covered Calls Work, will explore the deeper reasoning behind this strategy, including statistical advantages, behavioral finance insights, and how institutions use covered calls to outperform the market.

Subscribe & Stay Updated! Never miss an episode—subscribe to Wealth Building with Options on your favorite podcast platform.

Disclaimer: Options involve risk and are not suitable for all investors. Before buying or selling an option, read Characteristics and Risks of Standardized Options https://www.theocc.com/getmedia/a151a9ae-d784-4a15-bdeb-23a029f50b70/riskstoc.pdf

Ep5 - Options: Better Tools

Episode Summary: In this episode of Wealth Building with Options, host Dan Passarelli explores the foundational concepts of options trading. Using relatable analogies, Dan breaks down the mechanics of options, explaining calls, puts, and their practical applications. Additionally, he discusses how options function as financial tools for risk management, investment growth, and wealth protection.

Special guest John Kmiecik, Head Coach at Market Taker Mentoring, joins the conversation to share his insights from years of experience working with traders. Together, Dan and John dive into the psychology of trading, the advantages of selling premium, and why many traders transition from buying options to selling them. They also touch on the importance of developing consistent trading habits and how covered calls and cash-secured puts can serve as powerful strategies for investors.

Key Topics Discussed:

• Understanding Options Through Analogies: Comparing options to insurance, gas price guarantees, and even pizza coupons.

• Defining Calls and Puts: Explanation of how each type of option works and how they can be utilized by traders.

• Options as Financial Contracts: Exploring how options serve as tools for hedging risk, leveraging investments, and increasing portfolio efficiency.

• Common Misconceptions About Options Expiration: Understanding statistics around exercised, expired, and closed options.

• The Psychology of Options Trading: How trader mindset affects decision-making and success.

• Why Selling Options is a Popular Strategy: Examining the benefits of selling premium for generating income and managing risk.

• The Importance of Habit Formation in Trading: How discipline and repetition lead to better financial outcomes.

• Preview of Future Episodes: A look ahead to covered call strategies and their wealth-building potential.

Guest Spotlight: John Kmiecik John Kmiecik, the Head Coach at Market Taker Mentoring, has extensive experience educating traders. With a background that includes working with Goldman Sachs and a hedge fund, John has helped thousands of traders develop strategies for long-term success. In this episode, he shares insights on the advantages of selling premium and the importance of understanding both sides of the options market.

Actionable Takeaways:

• Start viewing options as financial contracts that can be leveraged for portfolio growth and risk management.

• Consider the advantages of selling options as part of your trading strategy.

• Focus on habit formation to build consistency in trading.

• Stay tuned for the next episode, which will cover covered call strategies in depth.

Resources Mentioned:

• See Dan and John's trade ideas on SubStack-https://wealthbuildingwithoptions.substack.com

• Market Taker Mentoring: MarketTaker.com

• Characteristics and Risks of Standardized Options: https://www.theocc.com/getmedia/a151a9ae-d784-4a15-bdeb-23a029f50b70/riskstoc.pdf

Subscribe & Stay Updated! Never miss an episode—subscribe to Wealth Building with Options on your favorite podcast app. Episode 6 will cover covered call trading and how it can help investors generate wealth faster.

Ep4 - Guest Episode: Mark Benzaquen, Principal at OCC Education

Episode Summary:

In this special guest episode of Wealth Building with Options, host Dan Passarelli sits down with Mark Benzaquen, a principal at the Options Clearing Corporation (OCC). Mark shares his journey from the trading floor to investor education, shedding light on the critical role of the OCC in the options trading ecosystem. This episode dives into key aspects of options trading, risk management, and the importance of financial education.

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Key Topics Discussed:

• Mark’s Background & Career Journey

  • From trading floor clerk to brokerage side and eventual transition into investor education.

  • How his experience on the floor shaped his understanding of options trading.

• Understanding the OCC’s Role in the Market

  • The OCC as a Central Counterparty (CCP) ensuring market stability.

  • Why the OCC is crucial for clearing and settlement in options trading.

  • How the OCC safeguards investors and maintains financial market integrity.

• Investor Education and Market Awareness

  • The OCC’s efforts in providing free education through the Options Industry Council (OIC).

  • Resources available to traders and financial advisors to improve their options knowledge.

  • How the OCC ensures investors are informed about market complexities.

• Challenges of Transitioning from the Trading Floor to Investor Education

  • The skills that traders acquire on the floor and their applicability in the broader financial industry.

  • The misconception that options trading is a zero-sum game.

• Common Pitfalls and Challenges Faced by Options Traders

  • Lack of awareness around corporate actions and their impact on options contracts.

  • The risks of after-hours trading and unexpected assignments.

  • Understanding complex strategies like iron condors and iron butterflies.

  • The importance of planning trades and managing risk effectively.

• The Wheel Strategy: Benefits & Challenges

  • How covered calls and cash-secured puts can be integrated into a long-term strategy.

  • Common struggles investors face when implementing the wheel strategy.

  • The necessity of being prepared for potential assignments and stock ownership.

• The Growth of Options Trading & Changing Demographics

  • The rise of younger investors in the options market post-pandemic.

  • The shift in trading volumes over the past decades.

  • The role of education in fostering responsible trading practices.

• Live Music & Personal Interests

  • Mark and Dan discuss their shared passion for live music and upcoming concerts.

  • Favorite concert experiences, including Red Rocks and the Sphere in Las Vegas.

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Resources & Links:

• Learn more about Options Clearing Corporation (OCC): www.optionsclearing.com

• Explore free options education with the Options Industry Council (OIC): www.optionseducation.org

• Check out Dan Passarelli’s work at Market Taker Mentoring: www.markettaker.com

• Read the Characteristics and Risks of Standardized Options https://www.theocc.com/getmedia/a151a9ae-d784-4a15-bdeb-23a029f50b70/riskstoc.pdf.

Make sure to join the SubStack Community at https://wealthbuildingwithoptions.substack.com/ for more wealth building insights, trade examples, and bonus podcast videos.  

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Final Thoughts:

Mark Benzaquen’s expertise in investor education makes this episode a must-listen for traders at all levels. Whether you're new to options or a seasoned investor, understanding the infrastructure behind the market and how to navigate it efficiently is crucial.

Ep3 - How Wealth is Created in the Stock Market

Episode Summary

In this episode, Dan Passarelli explores how wealth is created in the stock market and how the stock and options markets intertwine to generate opportunities beyond a zero-sum game. He discusses the fundamental differences between stocks and options, the role of market makers, and how investors can leverage options for long-term wealth creation. Along the way, he shares insights into game theory, the Monty Hall dilemma, and the impact of financial reporting on stock valuation.

Key Topics Covered

• The controversy around financial markets and investment strategies
• The Monty Hall dilemma and its implications for trading and decision-making
• Why options trading is not a zero-sum game
• How market makers and liquidity providers contribute to market efficiency
• The role of hedging in options trading
• The difference between listed options and warrants
• The importance of financial reports (10-Qs and 10-Ks) and analyst recommendations
• The buy-and-hold strategy and how covered calls and cash-secured puts can improve returns
• Exchange-Traded Funds (ETFs) and their role in modern investing

Resources Mentioned

• Read more about the Monty Hall dilemma and its investing implications on Dan’s Substack: wealthbuildingwithoptions.substack.com
• Join the Substack community for bonus video podcast episodes and exclusive content
• Learn more about options trading and risk management: Link to options characteristics and risks
• Visit Dan Passarelli’s website: Markettaker.com

Support the Podcast

• Subscribe to Dan’s Substack for premium investing insights
• Share this episode with fellow traders and investors
• Leave a review to help others discover the podcast

Ep2 - The Case for Building Wealth

In this episode, we kick off the podcast by tackling a fundamental question: Why should you focus on building wealth? Some say “money is the root of all evil,” but the truth is, money is just a tool—one that can help you achieve what truly matters in life. Whether it’s financial security, supporting loved ones, or pursuing your dreams, having more wealth gives you more options and control.

We also discuss:

• The real reason wealth matters (it’s not just about having more money).
• Why preferring more money to less isn’t greed—it’s rationality.
• How money isn’t just a store of value, but an investment in your future.
• The difference between wealth-building and gambling—and why the distinction is critical.
• How financial independence allows you to fund what’s important to you: retirement, education, travel, or caring for loved ones.

This episode sets the foundation for what’s to come, as we explore how to use the power of investing—especially options strategies like covered calls and cash-secured puts—to accelerate wealth-building.

Key Takeaways:

• Wealth gives you choices: More money means more opportunities to invest in what truly matters to you.
• Money itself isn’t evil—it’s a tool: How you use it determines its impact on your life and others.
• There’s a difference between gambling and smart investing: Strategic investing isn’t about chasing quick wins; it’s about long-term, sustainable wealth.
• You are in control: No one cares more about your financial future than you do. Learning how to grow wealth is the key to financial freedom.
• Mindset matters: Visualization, strategy, and a structured plan help transform financial goals into reality.

What’s Next?

In next week’s episode, we dive into how wealth is built in the stock market and the principles of generating alpha (outperforming the market). After that, we’ll explore derivatives, covered calls, and cash-secured puts—the strategies that can help you build wealth faster.

Resources Mentioned:

• • Think and Grow Rich by Napoleon Hill – A deep dive into mindset and wealth-building.
  • The power of leverage: How to work smarter, not harder, in investing.
  • How financial planners operate and why most don’t use advanced strategies like covered calls.

• The Gnostic Gospels - "If you bring forth that which is within you, then that which is within you will be your salvation. If you do not bring forth that which is within you, then that which is within you will destroy you."

Join the Conversation:

What are the most important things in your life that wealth can help you achieve? Send me a message or connect on Substack (https://wealthbuildingwithoptions.substack.com)

Subscribe & Stay Tuned: Be sure to subscribe so you don’t miss the next episode on how to generate consistent wealth in the stock market!

Wealth Building With Options Ep 1 - Prologue

Prologue

Episode Summary: Welcome to the inaugural episode of Wealth Building with Options, a podcast that takes you behind the scenes of writing a book on trading strategies and financial growth. In this episode, Dan Passarelli introduces his ambitious new book project, Wealth Building with Options, and explains why he decided to document the journey through a podcast.

Dan shares his motivations for writing this book, why the Wheel Strategy is the focus, and why so many traders struggle to make it work. He dives into the concept of options as a tool for wealth building, breaking down how options pricing works and why they tend to be overpriced. The episode also references key industry studies that support the effectiveness of covered calls and the Wheel Strategy as long-term investing methods.

In This Episode:

• Why now is the right time for this book and podcast.

• An overview of the Wheel Strategy and why it’s misunderstood.

• The importance of risk premium in options trading.

• How options work similarly to insurance and why premiums are often overpriced.

• Insights from major financial studies on the effectiveness of covered calls and cash-secured puts.

• The power of combining these strategies into a system for maximizing returns and minimizing risk.

Key Quotes:

• “We make time for things that are important. And this is important to me.”

• “The Wheel Strategy is capturing the risk premium.”

• “There’s massive evidence that shows the Wheel Strategy works, but like any tool, its effectiveness depends on the user.”

• “Without instructions or a recipe, even the best tools won’t help you succeed.”

Links & Resources:

CBOE / Ibbotson Buy-Write Index white paper

https://cdn.cboe.com/resources/education/research_publications/IbbotsonAug30final.pdf

BMO covered call white paper

https://www.bmo.com/advisorfunds/pdfs/Covered%20Call%20Whitepaper_EN.pdf

Beyond the Covered Call white paper

https://www.optionseducation.org/getmedia/47d693f4-04ce-4222-9329-3d0265b54155/mai-beyond-covered-call.pdf

Join the Conversation:

• Follow the Wealth Building With Options Substack for even more strategies.

• Subscribe to the podcast so you don’t miss an episode.

• Have questions or feedback? Visit Market Taker Mentoring.

Next week, we’ll dive deeper into the Wheel Strategy, why so many traders fail with it, and what you can do to avoid common pitfalls. Until then, Trade Smart!