I aim to make over $1,000 per week using options
SEE HOW👇
SEE HOW👇
1/ Covered Calls
This is the easiest way to get started with options
You need 100 shares of a particular stock to use this strategy
Let's look at an example
This is the easiest way to get started with options
You need 100 shares of a particular stock to use this strategy
Let's look at an example
2/ Covered Calls (cont.)
Shareholder owns 100 shares of Stock A
Stock A Trades at $50 today
You can SELL a covered call that expires next month on Sept 16th for $60 STRIKE Price
Let's say that option trades at $3.00
1 option = 100 shares
Shareholder owns 100 shares of Stock A
Stock A Trades at $50 today
You can SELL a covered call that expires next month on Sept 16th for $60 STRIKE Price
Let's say that option trades at $3.00
1 option = 100 shares
3/ Covered Calls (cont.)
Selling the option will earn you $300 ($3.00 x 100)
This is called PREMIUM and once you sell the option you get this $ in your account immediately
If stock A trades below $60 by the expiration date (Sept 16), then you the option seller keep the $300
Selling the option will earn you $300 ($3.00 x 100)
This is called PREMIUM and once you sell the option you get this $ in your account immediately
If stock A trades below $60 by the expiration date (Sept 16), then you the option seller keep the $300
4/ Covered Calls (cont.)
Let's say Stock A jumps to $70 by the expiration date
Since you own the shares, you will enjoy the gains from $50 to $60, but nothing above $60 because that is the STRIKE price
You must sell your 100 shares to the option buyer at the $60 strike price
Let's say Stock A jumps to $70 by the expiration date
Since you own the shares, you will enjoy the gains from $50 to $60, but nothing above $60 because that is the STRIKE price
You must sell your 100 shares to the option buyer at the $60 strike price
5/ Covered Calls (cont.)
This is a great strategy to add income in stocks you own that you don't think will jump as high as the Strike you decide or its a great way to lock in gains on a stock you own
Selling the shares off will create a taxable event
This is a great strategy to add income in stocks you own that you don't think will jump as high as the Strike you decide or its a great way to lock in gains on a stock you own
Selling the shares off will create a taxable event
6/ Selling Cash Secured Puts
The other strategy I use regularly is by selling puts in stocks I would like to buy at a lower price than where they are selling today
Let's look at an example
The other strategy I use regularly is by selling puts in stocks I would like to buy at a lower price than where they are selling today
Let's look at an example
7/ Selling Cash Secured Puts (Cont.)
Stock A trades at $50, but I think that price is a bit inflated and I would feel more comfortable paying closer to $40
You can sell a $40 put option
Expiration Date: Sept 16
Premium: $2.00
Stock A trades at $50, but I think that price is a bit inflated and I would feel more comfortable paying closer to $40
You can sell a $40 put option
Expiration Date: Sept 16
Premium: $2.00
8/ Selling Cash Secured Puts (Cont.)
Selling the put option would earn you $200 (100 x $2.00)
If the stock stays above the strike price, you keep the $200 as gain
If the stock falls BELOW $40, you are required to buy 100 shares at the $40 strike
Selling the put option would earn you $200 (100 x $2.00)
If the stock stays above the strike price, you keep the $200 as gain
If the stock falls BELOW $40, you are required to buy 100 shares at the $40 strike
9/ Selling Cash Secured Puts (Cont.)
This strategy allows you to earn premium while waiting for a stock price to fall to a price you are more comfortable buying at
You can recycle this strategy on a regular basis
This strategy allows you to earn premium while waiting for a stock price to fall to a price you are more comfortable buying at
You can recycle this strategy on a regular basis
10/ Selling Cash Secured Puts (Cont.)
The key on this strategy is to #1, you must like the stock and be familiar with the stock you are selling the option on
#2 is to have the cash available if the stock is needed to be bought. This is why it is called a "Cash Secured" put
The key on this strategy is to #1, you must like the stock and be familiar with the stock you are selling the option on
#2 is to have the cash available if the stock is needed to be bought. This is why it is called a "Cash Secured" put
11/ Selling Options
Both of these options do not come without risk, so one should be well educated prior to utilizing options
Once educated properly, these strategies can provide consistent income on a weekly or monthly basis
Both of these options do not come without risk, so one should be well educated prior to utilizing options
Once educated properly, these strategies can provide consistent income on a weekly or monthly basis
12/ Selling Options
One of the risks in covered calls is a stock could move up quickly, but your stock gains are capped at the strike price
Selling puts could see a stock fall violently, but you would be on the hook to purchase at the strike price
One of the risks in covered calls is a stock could move up quickly, but your stock gains are capped at the strike price
Selling puts could see a stock fall violently, but you would be on the hook to purchase at the strike price
13/ Resources
Both of these resources put out by @BusinessFamous are great and easy to read resources for those of you looking to get involved in these strategies
Both of these resources put out by @BusinessFamous are great and easy to read resources for those of you looking to get involved in these strategies
16/
If you enjoyed this thread:
Please follow me @dividend_dollar
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Thank You!
-Mark
If you enjoyed this thread:
Please follow me @dividend_dollar
RT the first tweet to share with your audience
Thank You!
-Mark
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