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Great explanation! One thing I would add regarding the con is the potential loss of income if SIRI were to, let's say, reach 7, 8, or 9 dollars. Your gain would be limited to only $0.32.
Thank you for explaining this so clearly. I’ve been studying options for 3 years and still haven’t started. I’m waiting until I feel comfortable in my ability.
Good point. But i wonder if you only had $200 in account and the broker allowed you to sell that put as in the example above. When the expiration comes, how are you gonna pay or I don’t get this part.
Thank you so much for unveiling the mystery of the stock market!! It is so intimidating with the fancy words and procedures, but your video makes it so clear!!!! Thank you and God bless your ventures!!!!
im preparing to deploy a cash secured put on an etf, but you should also mention that having the necessary funds is needed ahead of time. so if you're buying SIRI at $4.18 then you will need to have $418 ready to be assigned assuming assignment.
Great explanation as always, this video is perfect for whoever is learning how to sell options. I use csp and cc to improve my P&L ratio in one of my positions that I am currently in the red.
Hey Brian 👋🏼 could you do a video on money market accounts? From what I understand, that can be an account that keeps your cash liquid and can also have a high yield!!
I think you missed an important part of selling CS puts is to having the cash amount at hand incase the option gets exercised. Otherwise, going naked is very risky.
This video explains cash secured puts very well. But puts can be used in more ways than shown. Example: Some stocks have weekly options. It is more profitable to sell weeklies as the time obligation is much shorter than monthly options. Dividend stocks can be played to harvest the dividend and option premiums. It starts with a short put position that is assigned causing the investor to own the stock. With the stock, a call can be sold against the position to gain more premium. It is vital that the stock be kept through the ex dividend date so the dividend is harvested. The daddy of all plays with puts is to use margin secured puts. As it sounds, an account with margin can use it to secure a put position. The magic of this is that no interest accrues on the margin that secures the put. But a margin secured put can go bad if the price drops forcing the investor to buy the stock.
Another risk is if the stock skyrockets before the expiration date. For example, if SIRI goes from $4.89 to $6 before the expiration date, you could've made $1.11 if you had just bought the stock. Instead you only make 32 cents from the CSP.
Brian cover the UAW contract expiring and what it could mean if they go on strike. Work at a parts plant and I used to work at ford. I’d love to hear your opinion on the contract the workers. The company and anything in between and what it should be!
Can you also clarify the premium calculation and effect on purchase as when the price moves in the direction premium increase I mean I wonder about unlimited loss scenario when selling ?
Does timing also matter when you create a contract and it gets agreed upon? I'm assuming the advantage of buying a stock outright is the freedom of when to buy and sell as opposed to cash secured puts. Unless I have it misunderstood.
One thing I don't understand is why you can't set up an automatic sell position on the underlying stock at $4.18. That way if it falls to $1, you would still be net $0 as the sell position negates the losses of the put.
Is the price based of the closing price or is it within the trading day. IE the stock went to 4.20 but then closed at 4.51. Would that put be exercised??
When u sell the put you're basically shoring it. Do you have to buy the put back at anytime or do u let it expire? I'm guessing u do t have to and if u do you basically cancel the trade and don't have to buy the stock if It falls to or below the price?
so 1 put is 100 shares, and you buy the contract for .32, does that mean you are always expected to lose or gain $32? or does it depend on how many shares are actually bought or sold?
I did CSP on NVDA for 5$ for this Friday expiry, but don't see credit added to my buying power. when does the CR get added? Stock is down 10$ and I am down 500$, but I am expecting my account portfolio chart remains the same value because my CR 5$ and loss 5$ are equalized, but I am down 500$ and dont see that CR anywhere.Thoughts pls!
I got absolutely destroyed selling puts on AMC before the reverse stock split news. It was $5.26 at the close before the news came out. Currently trading at 70-80c split adjusted 🤦♂️ down 80%+ just like that on the assigned shares
Yes, you do. If you don’t have enough $ in your account, brokerage will Not execute your trade. ‘Cash Secured’ put. Find a cheaper stock you can afford to buy 100 shares.
"Awesome video! Are premiums taxed at short-term or long-term?" An option can be for over a year, although that is probably more usual for institutional investors that are math geniuses. So most of the time you would be charged for short-term gains of less than a year.
The only exception: you can usually do these cash secured puts in an IRA (tax advantaged accounts). In those, you won’t worry about taxes until you pull funds from the account.
It's all sounding wonderful, until it's actually time to pick the right stock. more often than not the premiums are low. and more often than not the stock price actually falls. Highest premium will happen only when stock price is at (Resistance) while selecting ATM strike price. and that's a great way to watch the price fall below strike and get assigned. if you choose below current stock price ATM, the premium will go down by a lot and it won't be worth it. if you choose a higher stock price, the premium will be amazing, but you gotta be super bullish for it to go higher by expiration. can't wait to see your next video on how you pick the right stock! and hopefully it's not a small cap companies.
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GET up to 14 FREE STOCKS when you open up a stock account here: a.webull.com/i/ClearValueTax
Great explanation! One thing I would add regarding the con is the potential loss of income if SIRI were to, let's say, reach 7, 8, or 9 dollars. Your gain would be limited to only $0.32.
Thank you for explaining this so clearly. I’ve been studying options for 3 years and still haven’t started. I’m waiting until I feel comfortable in my ability.
Great explanation! I would've mention that $450 will be needed in the account and will be locked until the expiration.
I feel this should have been necessary, some may not have known.
Good point. But i wonder if you only had $200 in account and the broker allowed you to sell that put as in the example above. When the expiration comes, how are you gonna pay or I don’t get this part.
@@tamaica7770 They wouldn't allow you to do so, it's cash-secured, so you need that as collateral, effectively.
YOU SIR ARE A GENTLEMAN AND A SCHOLAR!!! Awesome info!!
Thank you Edward! I appreciate the support and wish you a great day!
THANK YOU ! You explain it in a way the average person can comprehend it.
Best options explanations serie on RUclips !
Thank you so much for unveiling the mystery of the stock market!! It is so intimidating with the fancy words and procedures, but your video makes it so clear!!!! Thank you and God bless your ventures!!!!
Thank you for the Smooth-Brain explanation. Made it much easier to understand
Thank you sir for always sharing such valuable information with us peons
Hi Crystal, it's my pleasure and we're not peons! We're all great and just need an opportunity to shine.
This is what we need more of create a playlist ! Please more on trading education thanks !
Brian, what an American treasure. Thanks Brian, if I die poorly it’s not for your lack of knowledge, talent, and effort.
please do more videos of investing. You explain everything better than the fake guru out there. Love your contents.
Brian looks full today, that’s cuz he ate @RJTalksTV lunch yesterday 😂😂
Hi Gwillis! It's always great to see you! Thanks for that commenting, if they want to bring, I hope they can take it.
Waiting for Brian to comment on Reventure Consulting, lol
Lmao 🎉😂
Brilliant 😂
@@clearvaluetax9382well said
im preparing to deploy a cash secured put on an etf, but you should also mention that having the necessary funds is needed ahead of time. so if you're buying SIRI at $4.18 then you will need to have $418 ready to be assigned assuming assignment.
*450 is needed in his exp
Great explanation! Can you provide the link to the video on how to shop around for good deals on Cash Secured Puts?
Happy Tuesday Brian! Have a fabulous day!💗☀️
Happy Tuesday Rose Bloom! I hope you have a fabulous day as well!
Thanks Brian for getting back to to what we like!
Thank you for all the support Slaphappy!
You’re best Brian ! Love your clear explanation .
Thank you for that feedback and all the support!
Best put option explaination on RUclips. Thank you very much
Outstanding, I can't wait to watch your video on theta decay, when to buy to close, etc.. this is your strength, I think I've said it before
I like your style of presentation, animation with clear voice, excellent subject matter, jah
you put hard work and effort on your videos to clarify everything .Thank you !
Great explanation as always, this video is perfect for whoever is learning how to sell options.
I use csp and cc to improve my P&L ratio in one of my positions that I am currently in the red.
Very well PUTS video. Thank you for your hard work.
Brian makes it too easy
Thank your for that feedback and the support Mr. Lion!
@clearvaluetax9382
You're welcome. I appreciate hard work and honesty.
Thx B! Cant wait to learn more on calls and put options. im too unconfident to try it yet.
This is exactly what I use! Perfect for this market!
Great explanation, i will definitely be using this strategy to expand my portfolio and income.
Hey Brian 👋🏼 could you do a video on money market accounts? From what I understand, that can be an account that keeps your cash liquid and can also have a high yield!!
That's a great idea Melissah!
Great video Brian! I’m glad to know that you are a part of team theta!
I love you guys. You explain everything so good
Very great analogy in the beginning. Love it.
Thank you for your service and time.
It's my pleasure Christopher. Thank you for all the support!
Thank you so much!
It's my pleasure, thank you for all the support Becca's Mom!
I think you missed an important part of selling CS puts is to having the cash amount at hand incase the option gets exercised. Otherwise, going naked is very risky.
Hence "cash-secured"
@@IsaacC20 💀😂
Hi Brian.
Thanks so much. I want to start investing. I wish you could be my accountant
This video explains cash secured puts very well. But puts can be used in more ways than shown. Example: Some stocks have weekly options. It is more profitable to sell weeklies as the time obligation is much shorter than monthly options. Dividend stocks can be played to harvest the dividend and option premiums. It starts with a short put position that is assigned causing the investor to own the stock. With the stock, a call can be sold against the position to gain more premium. It is vital that the stock be kept through the ex dividend date so the dividend is harvested. The daddy of all plays with puts is to use margin secured puts. As it sounds, an account with margin can use it to secure a put position. The magic of this is that no interest accrues on the margin that secures the put. But a margin secured put can go bad if the price drops forcing the investor to buy the stock.
How did you learn how to trade options
@@ashleykim6432 Just by trading options. They are confusing for the newbie.
Great explanation thanks
Thank you for that feedback and all the support!
Another risk is if the stock skyrockets before the expiration date.
For example, if SIRI goes from $4.89 to $6 before the expiration date, you could've made $1.11 if you had just bought the stock. Instead you only make 32 cents from the CSP.
Really helpful and well explained. THANKS!!
I thank you for your videos, please publish more, and I wish you a very nice day, take care
TYFYS Brian! As always, excellent content.
Good explanation Brian. Look forward to your future videos.
Brian cover the UAW contract expiring and what it could mean if they go on strike. Work at a parts plant and I used to work at ford. I’d love to hear your opinion on the contract the workers. The company and anything in between and what it should be!
Thank you Brian, you are the best
So basically sell puts on companies you like? And only ones you like, bc the benefit of owning it or not is good either way?
Also you need to have enough cash to buy $100 shares in cases it goes below strike price
What brokerage do you recommend for a starter?
Hi
🍪🔪
Nice qdood, I like that!
Hi Cookie Knife! I hope you have a very nice day!
thank you for this awesome content. I learnt so much.
Great explanation..but quick query ..if stock goes down the underlying put contract value will also increase ..how do we manage that loss?
This guy hasn't missed, it's actually insane
Hello, Brian how is the weather in Chicago?
Thank you been waiting for this one 🙏🏻❤
Excellent video, thanks for this one.. pls share how do you look out for good deals on cash secured puts pls
Thanks, Brian...give a deal so I can try . This is my 1st learning
Good afternoon, Brian. I hope everything's going well for you today, BROTHER !
BRIAN THE PODCAST🦁 LION (the Walter Cronkite of podcasts 🏆)
Thanks Brian 😊 😊
THank you JR Raven for all the support, it's always so great to see you!
Awesome, we need more of this videos
Question: If SIRI goes below $4.50 on 6-August and then rises to $5.00 on 18-August, does the contract gets executed?
it can get executed if the contract hasn't expired
I love this guy. I always feel like I’m gonna die when I watch his videos. Let me get my coffee this one sounds juicy. LOL
Love this
Thank you for all the support Michael!
This is freaking cool🎉
Yes, agreed Land of Goshen Studios!
Thank you
My favorite strategy
do you have any videos about investing into a Roth IRA and how to take out money from it? Thank you!!
Thanks buddy, great video as always
Can you also clarify the premium calculation and effect on purchase as when the price moves in the direction premium increase I mean I wonder about unlimited loss scenario when selling ?
Awesome explanation - why would anyone take the other side of that bet? Seems unbalanced.
With 22 DTE, are you more exposed to Gamma vs taking position at 45 DTE & closing position at 21 DTE?
Does timing also matter when you create a contract and it gets agreed upon? I'm assuming the advantage of buying a stock outright is the freedom of when to buy and sell as opposed to cash secured puts. Unless I have it misunderstood.
One thing I don't understand is why you can't set up an automatic sell position on the underlying stock at $4.18. That way if it falls to $1, you would still be net $0 as the sell position negates the losses of the put.
You keep saying, “Siri” and my damn phone keeps trying to talk to me 😂😂 great video though
Hahaha that’s hilarious
Is the price based of the closing price or is it within the trading day. IE the stock went to 4.20 but then closed at 4.51. Would that put be exercised??
can you do a video on how to do ur own covered call?
Yes, I've created that video a little while back.
ruclips.net/video/D5Rjx_7XG2U/видео.htmlsi=yLEYrKFxPXGtqGM5
When u sell the put you're basically shoring it. Do you have to buy the put back at anytime or do u let it expire? I'm guessing u do t have to and if u do you basically cancel the trade and don't have to buy the stock if It falls to or below the price?
Does it get sold automatically after the expiration or do we have to sell to close?
so 1 put is 100 shares, and you buy the contract for .32, does that mean you are always expected to lose or gain $32? or does it depend on how many shares are actually bought or sold?
This is so hard to get I ready want to learn this
Great gob man!!!
Can you get out early?
No
I did CSP on NVDA for 5$ for this Friday expiry, but don't see credit added to my buying power. when does the CR get added? Stock is down 10$ and I am down 500$, but I am expecting my account portfolio chart remains the same value because my CR 5$ and loss 5$ are equalized, but I am down 500$ and dont see that CR anywhere.Thoughts pls!
This man is the 🐐 of tutorials 🫡
Great video as always :)
Thank you.
Is that different from put option
I got absolutely destroyed selling puts on AMC before the reverse stock split news. It was $5.26 at the close before the news came out. Currently trading at 70-80c split adjusted 🤦♂️ down 80%+ just like that on the assigned shares
Do u have an options course ?
Thanks
Can I do this for Berkshire Hathaway?
Brian- do I have to buy 100 of any stock that I choose to create a account? What if I can't afford 100 shares?
Yes, you do. If you don’t have enough $ in your account, brokerage will Not execute your trade. ‘Cash Secured’ put. Find a cheaper stock you can afford to buy 100 shares.
great video
Awesome video! Are premiums taxed at short-term or long-term?
short
"Awesome video! Are premiums taxed at short-term or long-term?"
An option can be for over a year, although that is probably more usual for institutional investors that are math geniuses. So most of the time you would be charged for short-term gains of less than a year.
It'll be short Sam.
The only exception: you can usually do these cash secured puts in an IRA (tax advantaged accounts).
In those, you won’t worry about taxes until you pull funds from the account.
Where can l find stocks for cash secured puts?
So I'll just own the stock if it falls rather than really losing?
you'd own the stock at 4.50, if the price of that stock never goes above 4.50 again you'd lose out there.
It's all sounding wonderful, until it's actually time to pick the right stock. more often than not the premiums are low. and more often than not the stock price actually falls.
Highest premium will happen only when stock price is at (Resistance) while selecting ATM strike price.
and that's a great way to watch the price fall below strike and get assigned.
if you choose below current stock price ATM, the premium will go down by a lot and it won't be worth it.
if you choose a higher stock price, the premium will be amazing, but you gotta be super bullish for it to go higher by expiration.
can't wait to see your next video on how you pick the right stock! and hopefully it's not a small cap companies.
He reiterated the point that you actually would want to hold the stock.
In your thumbnail you look so happy. In your videos you look so frustrated.
I did that when it was called shorting puts
Make sure you have the cash to buy the shares when the option mature.
Your also missing the other scenario as in SIRI goes to 20 and you missed that gains of the shares which is 300% for some premium you sold