Great content sir , the Following are the risks associated with investing for the futures 1 Leverage. One of the chief risks associated with futures trading/investment comes from the inherent feature of leverage. ... 2 Interest Rate Risk. ... 3 Liquidity Risk. ... 4 Settlement and Delivery Risk. ... 5 Operational Risk. This is why you need to seek proper guidance from an expert inorder to avoid you losing your hard earn money .
I would like to add. If you have a stock put to you, you can sell covered calls to recover any downside. Also, buying a Call or Put has the chance of losing all of the purchase price. With a cash secured Put, you get to own the stock. You are not left with nothing. I like this better than spreads or other strategies.
Except when you get one of those pesky large down moves, then your short call won’t offset much of the loss on the stock price. I’m not saying “don’t do it” just saying their is indeed still risk. I like to mix it up, spreads, covered calls, and cash secured puts… ya make some, ya lose some….
Being a former educator I want to express my admiration in your patience with some of the questions being thrown at you. You are amazing and have such empathy that each participate(s) concern(s).
Great strategy, especially if you want to own a particular stock. I think this is Buffet's strategy to start a position. This allows investors to always buy at a discount. Never pay retail, lol. Tony, another great presentation.
Thank you so much for your significant work, we profit 10% this month already , only with simply shorting puts! We will continue to follow your Market Outlook and Daily Play! With you and your team's help, we hope we can get retirement early!
One issue that you didnt mention is that when you sell puts on an underlying stock, the value of the stock can indeed go down but your put may not get exercised because the expiration has not reached yet, and 99% of the time the options get exercised at expiration, not during the term of the option. So the stock will go down and bounce back in a week time, but you will miss the buying opportunity because your put will not be exercised until expiration.
Tony, Every investor needs to see this webinar. It is truly eye opening. The yield received on a cash-secured put on a stock I want to own anyway is surprising. Thank you
Thank you for this idea. I hadn't considered it and have been using it consistently now for two weeks. I feel it gives me both better control of picking what I feel is a fair entry point for a stock as well as no having fear of missing out if the stock goes up and doesn't come down to what I feel is fair market. Thank you.
Amazingly clear explanations- especially contrasted against limit orders, thank you! I have never done a cash secured put before, for a lot of the reasons you mentioned at the start. But now I feel like I've been missing out and need to get started on it 🙂
You mentioned that you normally sell DTE 30 - 45 Days out. I notice that weekly options generate more premium / day. Would you advocate selling weekly CSP?
I think it's best to hedge the bet. So if going cash secured - hedge by buying unit puts in SPX or XSP to protect against a black swan. Run a spread - so know your loss limit - and configure the trade so you can reduce loss risk - that will reduce margin requirements.
Question. When selling a put option , you get a credit correct? Do you still get the credit even if the strike price is above the strike price? Or do you still get the credit if the option is excercised?
from what i understand you only lose money if it hits the strike price and continues to go down right? Exp: stock is $9 per share, sell cash secured put at $7.5 strike if the stock goes under 7.5 you lose? and if it hits $7.5 and stays at 7.5 you break even?
At the delta comparison you said you want to own the stock, but you also said you'd choose the .40 rather than .45 delta, giving you less of a chance to own the stock and less premium. Can you clarify?
Wanted to confirm, when the Sell Put hit the strike price, will we own the stock in that minute? Or it need to wait till the expired date to be own that stock?
Typically you'd only get assigned after the expiry date. But your counterparty (the person who buys your put) has every right to exercise the option right away when it hit below the strike price (In-the-money)
You always keep the cash, whether you get assigned or not, and you receive it immediately. You won't notice it in your total account balance though, because the option will have the opposite value. Example, you sell a put at $100 strike on ABC for $5 premium, you get paid $500 cash, but the put is worth -$500 (what you sold it for) so your account will appear the same. When it expires, the option disappears, removing the negative option from your account, and causing your balance to then appear to go up (at expiration).
If the put option price drops when the underlying price goes up, you said to never sell a put that is ITM, maybe you are referring specifically to wanting to own the stock... but say you sell a put option for 2.50 premium and the stock is bullish and a week before expiration the option is now worth 1.50. You could buy it back for 1.50 @ $100 profit, no? Wasn't sure if you were saying that the risk is just too high or that there was no scenario that gave profit.
Thanks for this Tony. When you mentioned that "Many times we hear about Covered calls 'only' earning 1-2%" but with Cash Secured puts, we can earn significantly 'higher yields's', you're not really comparing apples to apples with the Covered Calls with respect to the Deltas are you? I know you mentioned in another video that you would suggest a lower Delta for Covered Calls to ensure a high probability on the upside, but if one owns the stock and sells covered calls with that same 45 or 40 delta that you describe here with selling puts, it would indeed be the same yield no? I was just surprised to hear that you thought cash secured puts have a higher yield when I just think of it as simply the inverse with respect to Covered Calls.
Even when we compare the same deltas for calls vs puts, you'll see Puts trade at a higher IV than the same calls, which implies a higher yield on the same type of risk.
I watch a lot of RUclips videos and see a lot of traders earning massively and then I start to wonder what I could possibly be doing wrong because I’ve been trading for a couple of months and every trading attempt seems to be red, never have I seen a green day. It is really frustrating seeing loses without any profit. So, I decided to work a bit more on myself and then opened a demo account, do my analysis, then take the opposite of what I would normally take and get the same result. I'm starting to feel hopeless, any advice for a struggling trader?
@@deloriaenterprise744 You’re right! I do not lose money every single trade, but my main issue is trying to let my runners run up. . Very rarely do I catch big moves. Instead, they go a few pips in my direction, then go against me if when I try holding them. Also my entries would definitely need a lot of Improvement. A mentor would be a great idea but getting one isn’t as easy as it seems. If I may ask, do you know any genuine one?
@@brandoncolon418 I know one lady though, she’s not really a mentor but she’s amazing at trading. She used to work for a proprietary firm till she retired. Shew has been helping be for a long time now and I been making about $1k bi-weekly, What I'm trying to say is the 5% of traders in the world that are consistently profitable are not on RUclips, they are just random/lowkey people no one even expects. Her name was Sarah Alderson by the way.
@@deloriaenterprise744 Wow that’s amazing, if I’m not mistaking I think I have seen this name on a trading forum before, on discord one time, is she really that good ? And how may I contact her if that isn't too much to ask.
Tony, thanks for sharing this great information! I appreciate all the content that Options Play is putting out 👍
More to come!
Great content sir , the Following are the risks associated with investing for the futures
1 Leverage. One of the chief risks associated with futures trading/investment comes from the inherent feature of leverage. ...
2 Interest Rate Risk. ...
3 Liquidity Risk. ...
4 Settlement and Delivery Risk. ...
5 Operational Risk.
This is why you need to seek proper guidance from an expert inorder to avoid you losing your hard earn money .
Love his trading system , he ensure safe investment and better risk management.
Nice teaching.
I would like to add. If you have a stock put to you, you can sell covered calls to recover any downside. Also, buying a Call or Put has the chance of losing all of the purchase price. With a cash secured Put, you get to own the stock. You are not left with nothing. I like this better than spreads or other strategies.
Except when you get one of those pesky large down moves, then your short call won’t offset much of the loss on the stock price. I’m not saying “don’t do it” just saying their is indeed still risk. I like to mix it up, spreads, covered calls, and cash secured puts… ya make some, ya lose some….
@@John_Doe_6996yo pump it up my phreak.
Being a former educator I want to express my admiration in your patience with some of the questions being thrown at you. You are amazing and have such empathy that each participate(s) concern(s).
Great strategy, especially if you want to own a particular stock. I think this is Buffet's strategy to start a position. This allows investors to always buy at a discount. Never pay retail, lol. Tony, another great presentation.
Thank you so much for your significant work, we profit 10% this month already , only with simply shorting puts! We will continue to follow your Market Outlook and Daily Play! With you and your team's help, we hope we can get retirement early!
One issue that you didnt mention is that when you sell puts on an underlying stock, the value of the stock can indeed go down but your put may not get exercised because the expiration has not reached yet, and 99% of the time the options get exercised at expiration, not during the term of the option. So the stock will go down and bounce back in a week time, but you will miss the buying opportunity because your put will not be exercised until expiration.
Tony, Every investor needs to see this webinar. It is truly eye opening. The yield received on a cash-secured put on a stock I want to own anyway is surprising. Thank you
Tony you are absolutely wonderful for sharing these great information for free. I am learning a lot from you, thank you.
happy to hear you are learning a lot!
Thank you for the great content Tony. Truly enjoying your videos. They are very clear and informative.
Thank you for this idea. I hadn't considered it and have been using it consistently now for two weeks. I feel it gives me both better control of picking what I feel is a fair entry point for a stock as well as no having fear of missing out if the stock goes up and doesn't come down to what I feel is fair market. Thank you.
I'm trying to learn and I must say I'm making big progress. Thanks also to teachers like you. Thanks.
Excellent! Keep it up :)
Thank you, Simon. If you don't mind, do you use any screener such as Market Cameleon or others. I appreciate your time and input.
Amazingly clear explanations- especially contrasted against limit orders, thank you! I have never done a cash secured put before, for a lot of the reasons you mentioned at the start. But now I feel like I've been missing out and need to get started on it 🙂
You mentioned that you normally sell DTE 30 - 45 Days out.
I notice that weekly options generate more premium / day. Would you advocate selling weekly CSP?
Wonderful educator. Really kept my interest since am long in AA since Feb. 2021. Thank you Teacher!
Thank you for watching!
Wow, gr8 presentation about covered puts. The way U put the yield return, is very concise. Thx 4 sharing on Utube.
Glad it was helpful!
very informative video and excellent illustrations for every point. Thanks for sharing
Glad you enjoyed it!
I think it's best to hedge the bet. So if going cash secured - hedge by buying unit puts in SPX or XSP to protect against a black swan. Run a spread - so know your loss limit - and configure the trade so you can reduce loss risk - that will reduce margin requirements.
Would you sell options or buy long calls (LEAPS) if you are bullish, which strategy gives you more profitability
Tony. In today’s market, it’s very, very common for a 13k stock to drop 10-15 in a month. I would be starting out in a hole. Correct?
Question. When selling a put option , you get a credit correct? Do you still get the credit even if the strike price is above the strike price? Or do you still get the credit if the option is excercised?
you get de credit, never mind what happen with the strike.
OTM bull put spreads seem to work best for smaller accounts.
yes, one of my favorite strategies.
Thanks for your help 👍.
great video. you are the best Tony
from what i understand you only lose money if it hits the strike price and continues to go down right?
Exp: stock is $9 per share, sell cash secured put at $7.5 strike if the stock goes under 7.5 you lose? and if it hits $7.5 and stays at 7.5 you break even?
Are leap options suitable for put options selling
At the delta comparison you said you want to own the stock, but you also said you'd choose the .40 rather than .45 delta, giving you less of a chance to own the stock and less premium. Can you clarify?
What broker are u using ?
The most options I use are the credit put spreads.
Better to go for butter fly or iron condor rather than naked short puts.I have burnt my fingers many time.
Wanted to confirm, when the Sell Put hit the strike price, will we own the stock in that minute? Or it need to wait till the expired date to be own that stock?
Typically you'd only get assigned after the expiry date. But your counterparty (the person who buys your put) has every right to exercise the option right away when it hit below the strike price (In-the-money)
I've sold a few. Still learning.
Will I be able to keep all the premium if I am assigned BEFORE expiration?
yes
@@art_without_borders
Thanks
You always keep the cash, whether you get assigned or not, and you receive it immediately. You won't notice it in your total account balance though, because the option will have the opposite value. Example, you sell a put at $100 strike on ABC for $5 premium, you get paid $500 cash, but the put is worth -$500 (what you sold it for) so your account will appear the same. When it expires, the option disappears, removing the negative option from your account, and causing your balance to then appear to go up (at expiration).
@@landsavage Thanks a lot, a long-time puzzle finally solved.
If the put option price drops when the underlying price goes up, you said to never sell a put that is ITM, maybe you are referring specifically to wanting to own the stock... but say you sell a put option for 2.50 premium and the stock is bullish and a week before expiration the option is now worth 1.50. You could buy it back for 1.50 @ $100 profit, no? Wasn't sure if you were saying that the risk is just too high or that there was no scenario that gave profit.
Thank you.
You're welcome!
Good stuff!!
Thanks!
well done 👍👏🏻
Thank you!
Thanks for this Tony. When you mentioned that "Many times we hear about Covered calls 'only' earning 1-2%" but with Cash Secured puts, we can earn significantly 'higher yields's', you're not really comparing apples to apples with the Covered Calls with respect to the Deltas are you? I know you mentioned in another video that you would suggest a lower Delta for Covered Calls to ensure a high probability on the upside, but if one owns the stock and sells covered calls with that same 45 or 40 delta that you describe here with selling puts, it would indeed be the same yield no? I was just surprised to hear that you thought cash secured puts have a higher yield when I just think of it as simply the inverse with respect to Covered Calls.
Even when we compare the same deltas for calls vs puts, you'll see Puts trade at a higher IV than the same calls, which implies a higher yield on the same type of risk.
Great work
Thank you!
Take the $500 and buy $500 worth of the underlying. If the stock closes above the strike price, then you still have a stock with zero cost basis.
YES
Thanks
The stock price went up 8% today alone, but I'll make 3% with my short put after ten days
yes almost all i do
Did anyone catch the ARKK play he mentioned?
3
On a side note.... I think Tony likes to drink crown royal..... he keeps saying CCL = crown royal. ( check 34:08..... we love you Tony) :)
😆 sometimes I'd rather own Crown Royal than Carnival Cruise.
1
👍🏼
I watch a lot of RUclips videos and see a lot of traders earning massively and then I start to wonder what I could possibly be doing wrong because I’ve been trading for a couple of months and every trading attempt seems to be red, never have I seen a green day. It is really frustrating seeing loses without any profit. So, I decided to work a bit more on myself and then opened a demo account, do my analysis, then take the opposite of what I would normally take and get the same result. I'm starting to feel hopeless, any advice for a struggling trader?
DO NOT believe a lot of these youtubers they make it seem so easy. And also, maybe you should just quit trading isn’t for everyone.
@@amirsaheed2645
@@deloriaenterprise744 You’re right! I do not lose money every single trade, but my main issue is trying to let my runners run up. . Very rarely do I catch big moves. Instead, they go a few pips in my direction, then go against me if when I try holding them. Also my entries would definitely need a lot of Improvement. A mentor would be a great idea but getting one isn’t as easy as it seems. If I may ask, do you know any genuine one?
@@brandoncolon418 I know one lady though, she’s not really a mentor but she’s amazing at trading. She used to work for a proprietary firm till she retired. Shew has been helping be for a long time now and I been making about $1k bi-weekly, What I'm trying to say is the 5% of traders in the world that are consistently profitable are not on RUclips, they are just random/lowkey people no one even expects. Her name was Sarah Alderson by the way.
@@deloriaenterprise744 Wow that’s amazing, if I’m not mistaking I think I have seen this name on a trading forum before, on discord one time, is she really that good ? And how may I contact her if that isn't too much to ask.
No
Great content, please revise your slides before hand... It will make you look more professional...