(EASY) How to Make Weekly Income Selling Options
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- Опубликовано: 22 мар 2024
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See the adjustments and strategies that can help you generate weekly and even daily income using options! Selling shorter dated options can generate a faster income stream than longer dated options, understand how they work and the risks.
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I agree that many people are considering NVDA as the "Stock of the year." However, I'm curious about which stocks could potentially become the next Nvidia in terms of growth over the next decade. I've allocated $200k for investment, aiming to retire comfortably.
I think the next big thing will be A.I. For enduring growth akin to Nvidia, it's vital to avoid impulsive decisions driven by short-term fluctuations. Prioritize patience and a long-term perspective consider financial advisory for informed buying and selling decisions.
Facing a similar situation, I sought advice from an CFP. Through portfolio restructuring and diversification with good ETFs, S&P 500 and growth stocks, I've turned my portfolio around from $200k to over $800k in a few years.
Your CFP must be really good, I hope it's okay to inquire if you're still collaborating with the same CFP and how I can get in touch with them?
She goes by ‘’Vivian Jean Wilhelm’ I suggest you look her up. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
Thank you! I entered her full name into my browser, and her website came out on top. I filled her form and i hope she gets back to me soon.
1. What time are you buying these puts on Fridays? If they are PM settled are you buying puts at 3:55pm EST? 2. On 10/20/23 you were assigned I assume at 4pm EST. If you were assigned at 4pm, when do you sell the covered call that expires on 10/27? After hours trading?
Excellent presentation. Thank you.
Hi Leandro member from NY
This was a really excellent presentation. One of the best I've seen so far. Very clear & concise.
5- insightful thankq
Tony, enjoy the videos and the fact they they go so well into detail. Keep the hour long ones going!
Thanks, we will definitely continue this. We're even considering slightly longer format to go deep into certain subjects.
@@OptionsPlay It's interesting that very few traders ever speak about 2 year Bull Call Spreads when they offer the greatest returns that I've witnessed. Why is that? Everyone just super short term in their thinking? An investor can go to a 30 Delta and end up making 2, 3, 4, 5, at times 8 X their money. And you can pull out along the way if it doesn't look like Tesla or NVDA etc...will end up there, without losing much or any capital.
Weekly credit spreads is good!
Thank you Tony. I am from Hong Kong.
Makes perfect sense!!
Is roll-over to a later date a feasible alternative if one doesn't want to own the etf ? thx
How you calculate the return in the spreadsheet
Howdy 🤠 from Arlington, Texas
Brilliant, very encouraging. The spreadsheet was straightforward and easily understandable. Agreed, you need 50K or more to cover assignments. Thank you.
Glad it was helpful!
If you want to lower your margin, instead of writing covered calls, write in the money puts.
Tony, please explain the impact of dividend on selling SPY puts/calls using this strategy. Doesn't selling calls/puts also involve the seller to pay out the dividend when due? Thank you!
Good teaching. Should add to the beginning slides that you need an account with at least $50k
why do You say that?
No you don't cash secured puts you just cover the price if is assigned
@@Sanholomcyes and the etf his talking about is over 400 dollars a share
@@tjadd5454yeah to pricey for me
@@drek273 watch the video. He literally says that. It is needed when you get assigned and have to sell calls
One doubt. At 1:00:34 once you got assigned, you started selling calls for the strike price at which you got assigned. Now what if the underlying stock or indices keep falling again and again to a point that your 429 strike price never yields any premium at all? In your example, fortunately it bounced back to 430, and hence you could continue selling puts again, but don't know what would you do for the case I mentioned above. Thanks for your time and this excellent videos
I addressed this in the video, yes there is the possibility that you collect very little income, but usually there is still some very small yield. Remember that you are comparing this to a buy/hold strategy that would have the same downside risks without any yield.
@OptionsPlay so it is ok to keep receiving penny premium for more than year if market crashed, and spy stayed less than 350 for months or even years? It is not about comparing buy and hold. It is about how long you continue to receive penny premium.
Great presentation, but you didn't spend time addressing the margin expense. At about 7+%, your broker would charge you about $70 per week to borrow the money, which is OK if you have it. A way to lessen the pain is to follow the strategy exactly, and buy into a broker's money market fund so you can earn about 4%-5%, (or about $40/wk) for putting up the $50K to buy 100 SPY. If my assumptions are right, the differential margin expense would cost you about $30/week. ($70 interest charge to you minus $40 you earn from the money market.) You should be getting more than $30/wk selling calls. But, you still need $50k to buy 100 SPY to offset the interest charge to you for margin. I think it's still a sound strategy.
Absolutely loved this course! I've been trading options with a financial advisor for over a year now and I've pulled in approx $680k.
This comment defines my investing journey for the past year. My 150k has gradually grown to 910k trading stocks my FA, Ann Marie Celentano. It's an approach I recommend.
Did a background check on google for this lady you mentioned and I'm impressed by her record. I was also able to reach out. thank you for recommending
This comment should be deleted and your accounts should be banned
What would be the range of annual income, minus taxes, for this strategy starting with $1 million?
Hi Tony, after my Sell Put gets assigned, what happened if nobody buy the Sell Call from me?
95% of options trading is fully electronic market making. They guarantee quotes on both the bid/ask and as a retail trader you will almost never be able to take the full available liquidity on the bid or ask. However, as a general rule of thumb, it’s best to check options liquidity before entering a trade.
Hello…from Philippines-- first timer
Thanks for coming
Hi first timer
From Nigeria
what is the difference between a naked put and a cash secured put? Is the margin requirement not the same?
How but a defined risk weekly strategy?
We are doing "short put" which is bullish and so it is not unusual in a bullish market. Why does Tony say, this is unusual at 30:40. I am little confused. Any thoughts please? Thanks.
Hi Tony, is this strategy suitable for ETFs with leveraged 3x bull or bear
He addressed this. He doesn’t recommend it because of the increased chance of gapping
Seems like a platform should just automate this strategy since there's really no decision making, though 5 minutes for one day a week isn't too burdensome.
Our platform can help you identify the exact expiration and strike for this strategy. We are also launching direct trading integration next week which would allow you to directly trade from OptionsPlay for this strategy.
How do you handle or hedge if the market takes an extended move down i.e. a war or covid situation where the market is down and assigned for several weeks.
Hi Tony, Are you saying to sell a new naked PUT on the same day your previous PUT expires. Would that not double your margin exposure on the day? Also if you sell the new naked PUT in the morning and the market tanks the previous PUT will get assigned at the end of the day. Now you will own 100 shares and also have a naked PUT. So should you Roll or decide the next day on selling the next PUT. I hope the way I worded it makes sense? or If anybody else understands what I'm asking I'd appreciate you input. Thanks
Thanks for the question. Just to clarify, you should never have two puts at the same time. You would want to close a put before selling a new put to open.
Thanks Tony, and also thank you and Jess for great video explanations.
@@OptionsPlay❤
In an entering bear market, you might be assigned the options and the stocks keep going down. There'll be a period where selling a covered call that is so far OTM that the premiums are very small. Of course, if the stock eventually goes back up, then the premiums become bigger, but the risk comes for certain sectors where the sector can get hit for a long time before coming back up (eg, housing sector ever since fed increased rates)
You’re right. Keep in mind that this strategy is comparable to a long term investment strategy. So consider that when timing when you start trading this strategy.
Don't you think if these were monthly then risk of assignment would have been alot lower?
Hello. Have a great day trading.
Biggest issue with wheel is the strategy fails when an index peaks. If you are selling calls because you got assigned and the etf/index keeps tanking the premium could get to the point where u basically get nothing on the weekly calls all while potentially losing hundreds or 1000s on the 100 shares. Eventually the calls at your strike price basically will net you a .01 assuming it’s that far out of money. If there is some protection against this in this strategy I’m all for it. Someone let me know. I have the cash but I’ve tried wheel strategy and that’s the issue I noticed. I ended up buying to close the call because it was too far out of the money to generate any premium vs the money I was losing. Your only option seems to be to move your strike price down which puts u at a potential loss on the shares if u have to move down far enough.
Look, the Wheel strategy is not a magical strategy that doesn’t experience any downturns. It’s a strategy to be deployed for your long term investment portfolio. Any long term investment portfolio will drop in value when the market drops. However the wheel strategy will consistently add anywhere from 5-15% annualized yield consistently on that portfolio that will offset some level of downside.
@@OptionsPlay fair enough appreciate the comment! Solid videos overall. 🙏 Thanks
How do you calculate the margin requirement
Your brokerage firm has a formula, but it’s approximately 20% of the underlying market value.
@@OptionsPlayyou would need the full $50k cash if assigned though, correct?
Once you are assigned, if you don't have the cash to cover the 100 shares, the cash that the broker lends you will be charged at an interest rate decided by the broker. You did not factor in this aspect as well in your return calculation.
He mentioned you need an account of $50k
When I get assigned, does it only happen on the day of expiration or the assignment can happen on any day before the expiration?
Technically, assignment can happen any day but in the real world, the vast majority of assignments happens at expiration
I only sell put on etf or stock in uptrend when the price pullback to support level (50 sma or trend line) n this increase the odd
Thanks for sharing!
Alex, How do you do with the strategy?
@@powerfulldavinciinvestment3367 because selling put is a bullish strategy, you don't mind to own stock if get assigned. So it is best to sell put on uptrend stocks with great fundamental, technically it is best to select short strike at slightly below support level near at the money to collect more premium n has higher odd the stock will go up. Just avoid trading when a stock has imminent earnings date
@@powerfulldavinciinvestment3367 AMD is a good example to sell put. It's an uptrend stock n now pullback to 50 days moving average, I sell weekly put at $172.5 on Monday
can you do this with /ES?
Yes, you can but contract sizes are way larger and may not be suitable.
If you look at the returns on 30:40 sheet, if you bought 100 shares of spy, you would have had 8700 profit, while by selling the options, you only had about 3000-4000 return. So how does this strategy work on spy. Maybe works for other more volatile stocks like NVDA? The premium is higher in put options?
So this works nicely when markets are in an uptrend. Or you could have started this strategy and bought at the top of the market in 2000, and never recovered until about December 2012.
Yes, the success of almost all options selling strategies is dependent on when you start, but so is every long term investment strategy.
Amazing training! So, lets say Tesla is tanking and is at 150 share price and $37 million is bought on Tesla 230 Puts that expire on June 21st (2 months away) would that person make a ton of money if tesla continues to tank?
Is there a risk of being assigned a contract after hours? During trading hours, you are OTM, but after hours, it goes ITM on the day of expiration.
Good content but please improve the sound. Maybe the speaker was too close to the mic. It makes it a little harder to focus on the information
❤❤
Great upload. I have a question. Unfortunately I have short 100 QQQ . What can I do to generate such strategy. Hope to get some feed back from anyone. Thank you in advance.
please improve the sound quality!
I will next week. My 2 year old lost one of my AirPods last week!
Liquid ETFs are expensive these days. Any suggestions for trading the wheel with an account less than $20k?
PS. I would like to practice this “wheel strategy” with my paper account just to see how it would play out!
thoughts on the same strategy but on 0DTE?
I’ve done 0dte wheels successfully. My only issue with it is the premium at 30 Delta is minimal and so the risk to reward ratios are not good
Sound is poor.
Thank you..for the calm, clear, didictical instruction❤
How about TQQQ?
Theoretically you can, however the liquidity in TQQQ doesn't hold a candle to QQQ. You may experience very different results once you factor into transaction costs.
Does anyone have a sample spreadsheet for keeping track of returns? Im terrible with spreadsheets and cant seem to get one to work.
Tunnel sound. Need better mic.
I will next week. My 2 year old lost one of my AirPods last week!
Can you use this strategy with an IRA account whereby, you are not allowed to use margins?
You can as long as your broker allows option trading in IRA’s. I have both a Roth and traditional IRA at Schwab where I trade option strategies like this.
I’m so confused. He keeps using the term “covered call” are we not selling a naked call once our naked put is assigned? If not, that means we should just buy 100 shares of the stock while selling puts & calls as stated as opposed to having the margin requirement $ amount in your account
He is indeed 'assigned' the 100 shares, which means he does have to acquire the 100 shares of SPY, but his Broker, because he is a Tier 4 client, enables him to take assignment with partly borrowed funds from his broker and he is partly using his cash. So he is essentially charged a small interest rate (usually around 12-13% annualized in todays market), while he is using his brokers capital to help him acquire the shares. He must have the equity somewhere else though, either via stocks, bonds, or cash, for the broker to allow him to do this. So it is indeed a covered call that he is doing.
ok in that case can I just hold the full 100 shares in cash in order to avoid the interest once assigned? Also, do you think it makes more sense to own 100 shares of the underlying while I sell puts and calls? or does that defeat the purpose of the strategy?
@@drek273 Yes, you can hold the full 100 shares in cash in order to avoid the interest once assigned, sure. It can make sense to hold the 100 shares if you would like to sell calls. If you are looking to sell puts in addition to holding 100 shares, the broker will likely have additional margin requirements (need more cast set aside because you may be assigned on the next 100 shares for the puts you sold and you may need the cash to acquire those in addition to the 100 shares you own).
Once your naked put is assigned you will own 100 shares of the underlying. So you are covered when you go and sell the call, it will not be a naked call.
Ok thank you!@@OptionsPlay
If you are not in the financial market space right now, you are making a huge mistake. I understand that it could be due to ignorance, but if you want to make your money work for you...prevent inflation
People dont understand that the prices of things are never going back down. This inflation is deeper than we think. Those buying groceries are well aware that the real inflation is much over 10%. The increments dont match our income, yet certain investors still earn over $365,000 in stocks and assets. Wish I could accomplish that.
30 delta weekly premium is very low almost nothing
This is called a cash-secured put and not a naked put. You got to have about $45,000 to hold the SPY that was assigned to you.
You need to apply for a higher options level to sell it naked but it can be done. You do not need to post the $50,000 in cash to sell a SPY put.
If you don’t have the $50,000, what happens when you get assigned?
Good information, Echo is annoying
Will fix for the next session! My 2 year old lost one of my AirPods and working with just 1 for the week! :)
These return numbers are not realistic because you should use each entry gain divided by your bankroll rather than the different margin requirement each time. Or at least you should always use your highest possible margin requirement (20k+) because that is the money you need to set assign for doing this strategy, and likely plus some additional fund for buffering, and these are your real working capital. You are overestimate your % return by a lot here.
I disagree with your numbers. When selling puts your going off the margin requirements of just the put, but in reality you never know when your going to be assigned so you really need 25,000 to 30,000 in cash set aside for this strategy. So really you need to figure your profits off of that margin week after week, which significantly reduces your returns. It should always be off of total margin requirement for the whole trading system.
I prefer to do PMCC on XSP or SPX. No risk of early assignment, similar margin requirements, no risk of having to purchase 45k of stock if assigned.
I've already factored that into the spreadsheet
@@thomas1942can you please elaborate on this ? What if you only have a 5000 account ?
Do you have a school I can come to
OptionsPlay Education is in session every Thursday live at 4:15PM EST. Come join us and find out more at OptionsPlay.com
Great Video... Since I am trading through my IRA and cannot get Level 4 for margin, I have put a different spin to this strategy I am selling Bull Put Credit spread. Selling a 30 Delta and buying a 10 delta for my protection Current trade Sold 515 put on 4/5 for $2.02 purchased a 505 put for $.057 Net credit $1.45 ($145.00) Putting up $1,000.00 in protection. $145/$1000 = 14.5% ROC . If assigned have cash available to start selling Calls. Your thoughts?
In my opinion, your risk to reward ratios are off with that example. 1 max loss would wipe out 9 weeks of max profits. I aim to make at least a quarter to half of my max loss on credit spreads to reduce the risk
I don't like this I would rather sell in the money covered calls here's why you're talking about having enough capital to own the shares anyways, you have a greater chance of success and the call premiums are much higher than puts w weeklys plus u get the dividend sometimes
But for Capital Efficiency, the returns he's receiving very well may be better than the covered calls. Because he's using just the margin requirements ($8500 to eke out those weekly returns) and even when assigned, he's not coming up with the entire amount to buy the shares. He's using his brokers money to do much of it. That's why the margin requirement says $20K when assigned. So the numbers would indeed need to be crunched to find out whether he is still able to eke out better returns with this strategy based on the capital he is using.
@@JamesDidato ok look right now at the april 6th spy chan...523 put 2.44 523 call 325, close price 523.07 so 7 cents in money if it goes below 523 you own the sares in either case but you collect 33% more premium for 1 week, 5% interest that week is about 50 cents per share so u are slightly ahead w the calls
So its kinda a coin flip w calls a bit ahead but what i like is when stock falls to your price you keep the previous intrinsic value instead of getting no reward for being assigned a put...and u still get paid for the interest difference
I'm favoured, $60k every week! I can now give back to the locals in my community and also support God's work and the church. God bless America.
I agree that there are strategies that could be put in place for solid gains regardless of economy or market condition, but such executions are usually carried out by investment experts or advisors with experience.
TRAVISSAMANTHA1 goes deeper than just looking at surface-level trends. She explores technical, fundamental, and sentiment analysis, offering a comprehensive perspective on the market..
TRAVISSAMANTHA1 strategy has normalized winning trades for me and it's a huge milestone for me looking back to how it all started.
A major distinction between winning and losing is using the right strategy and of course with signals like those of TRAVISSAMANTHA1 , profit is assured.
SAMANTHATRAVIS1 is all about simple technique that are highly profitable, I really admire her winning mentality.
Can not sell naked in an IRA.
Options are so easy. There’s no risk at all
I've never seen a trade with no risk. You must be new to trading.
@@djk-si9ve professional futures trader at the Chicago mercantile exchange for a long time.
The first step to successful investing is figuring out your goals and risk tolerance either on your own or with the help of a professional trader but is very advisable you make use of a professional trader as a beginner.
Any recommendation for a professional trader.
Any recommendation of a good trader.
*Yes she's mostly on Telegrams.*
*@TABBRAN.*
*She has a verified blue star on profile.*
doesn't seem too difficult at all to sell options like this
Scamming again? Not easy ...
Great content but Wish your videos were shorter 15 minutes tops and it’s kind of annoying asking the audience to type 1 or 2. Also there’s no need to say you are the Chief humbleness please
Man do you ever do any video less then 1 hour? Jeez. video should be 5 to 15 min max.
Dale @ Lk Nebagamon, WI
You need to set aside at least 45-50K for this strategy to be fruitful. You should be clearer in the first slide of your presentation.... Please and this is just one trade on SPY.
Cry me a river😊
Exactly what I mentioned as well
And if you put 45-50K aside you should calculate ROI on that amount and that is nowhere near to 1-2% per week.