@@RickOrford I couldn't login Discord on my laptop because I installed Discord app on my mobile as well with the same mobile number. I have to wait for support to remove the mobile number from my app.
Having a working trading strategy is far the most important step to becoming a successful trader. I have tried multiple unsuccessful methods in the past but so far I’m making progress with professional help.
Herman Jonas, an astute trade analyst is the brain behind my success. I've gotten into a plethora of assets with $44k spread across stocks (options and futures) for the short term and Roth IRA, index funds, and ETFs, for the long term. Now I sit back, and just reinvest at intervals while I handle my other businesses.
How can I reach him, please? I'm buoyed by the good recommendations I’ve come across elsewhere. I need help with my trades. I'm ready to pay for his services.
Your assistance was helpful. I was able to have a conversation with him via mail. What's even better is that he's certified with a registered broker. I'm getting started right away!
Hi Rick, Phenomenal job. My favorite tip was at the very end, the 'buy to close' option to buyback that contract you sold and potentially double dip on that same date with another contract. Please ask users to watch out for brokerage fees. To buy it to close, you might still have to pay a transaction fee which could be up to $10 or so. Something to consider rather than letting it ride out to expiration which will not incur another transaction fee. Please double check your comments at 14:16. I think you meant that you might be forced to buy something "for much more" than what it's worth. Using your Apple example you are buying something for $130 that's only worth $120 (so 130 is much more than what it's worth). I also agree with your opinion to only buy something you want to hold because that Apple stock will (likely) eventually return to 130 so you don't really lose. Thanks again for this really thorough and clear video!
Thanks for the kind words, Dave! You’re right, brokerage fees can eat in to profits; and the statement about “being forced to buy something for much less than its worth” could be clearer. Indeed, if the underlying equity falls below the strike price, the investor will be forced to buy the equity at the strike- and that equity will certainly be worth less than the price paid. Stay tuned for a follow up :-)
@@DeezNutsInYourMouth101 That's the risk. If the stock moves below the strike, the put will be in the money. You could buy it back, and sell one with a lower strike (known as rolling) to help offset the loss.
Yes you are right! Bitcoin trade is the best investment anyone can ever imagine and the profit is huge, believe me this is the best time to invest in it based on the current market status
I have been researching all this while for a digital asset to invest in and i found forex trading to be the most profiting of them all, I'm definitely bouncing on
venturing into Bitcoin trade with an expert trader that has adequate orientations about signals 📈 ensures great profits within a short period of investment
Nice video with good info on put option, It is really helpful to us traders, but Investing on crypto is the best and fastest way of making money, but only few understood the secret of crypto.
Excellent education. You are a really really excellent teacher for a 72 year old person like me. You speak slowly and clearly and explain in simple terms. You are definitely the best teacher on this subject. You have made me a few thousand dollars in the last few weeks. God bless you and keep this channel and reaching the lives of other people.
Great explanation and fantastic use of analogy with coffee. I'm based in Toronto Canada and was introduced last year to generating income from selling naked put options and covered calls on stocks that I would love to own anyways. It's been great in a bull market, although in a bear market with higher premiums due to higher volatility It's been challenging. However it's been a great experience and ride.
@@Bbfanatic You can only sell puts when you have capital to buy stocks if assigned and if you don't have capital on hand and can't sell puts, you can't collect premiums. Collecting premiums selling covered calls is ideal in a bull market or when the market is up.
I just started doing covered calls and I love it. My bank was paying me less than twelve dollars a year now I make $1200 a week selling covered calls just the opposite to puts but same principal . Your video explained the put process great!
Sir, you are the GOAT. I've been trying to understand options since July, and it took me a month to actually understand selling calls (no giggling please). You're video was simplistically, brilliantly understandable, and I feel secure enough in my understanding of selling puts to actually give it a try! Cheers!
I really liked the Sally and Jimmy scenerio! It helped me "get it!" I'm interested in options trading, specifically selling Puts and this helped tremndously. TY!
Thanks kindly! Considering this was one of my first videos, please also have a look at one of my latest and let me know what you think 🚀 How to Select Put Options to Sell: Expert Guide ruclips.net/video/PLSIcLhF6zw/видео.html
I am glad finding this clip and seeing someone doing exactly the same thing that I am doing. You are hitting the very key point: “pick a underlying quality stock that u really want to own”. A few additional points I would like to add: 1. I also use technical analysis to open the positions when the stock is in RSI overbought region. 2. Use “roll out” strategy when the option is in the money (losing money) to wait for the quality stocks to bounce back up. Using these combination of sell put strategy has increased my winning rate dramatically and making a very profitable weekly income around $8k to $12k. There are others doing sell put but seldom hear others use sell put to get out of trouble. Like to hear feedback from others with respect to that
Thanks for the kind words. Absolutely, 100% missing is something about rolling and using technical analysis to help with decision making. I’ll have to make another video about it!
Rick - Great video. But just and FYI @14:16 - as a PUT option seller, you might be forced to buy something for much more (not much less) than what it's worth.
Great video! But, in the "real life examples" section the written explanation can be confusing for a beginner. When I first started selling puts I had a better understanding of the relationship between the buyer and seller when someone told me that the option seller was selling a "contract". I think if you inserted the word "contact" between the words "option" and "seller" it would bring more clarity to someone who is just getting started. I know it was a light bulb moment for me when I first started out. I love the cartoon illustrations! I'm a visual learner, and a successful high school drop out also. Thank you for the videos. Please keep them coming. 👍
Ok, you earneed the credit, the video is nice to watch, your style is simple and straight forward, I have not sold options yet, I like to buy good quality stocks. I think I am going to watch more of your videos in order to learn more before I sell any put options. The best part of this video is your emphasize to sell put options on good quality stocks or etf, not just any stock. My son is about your age, I think I am going to send him the link to your youtube channel, he is like me, invests only in quality stocks and mutual funds, and selling put options could be a side money maker. Thank you for this video.
Thanks for your kind words. Yes, selling puts should only be done on stocks you’d actually want to own- as you might end up getting assigned at some point! Happy to answer any questions along the way!
I’ve sold puts, it works. Make sure, just like he said, that you sell puts on a stock that you wouldn’t mind owning anyway, and it has to be quality, not some risky junk stock that may never go back up. This way, you’ll sleep well knowing you own quality, even if you paid a little more than what it’s currently worth.
I’ve watched endless videos on this subject and still remained confused. Many videos seemed to contradict each other. However, your explanation with the coffee bean cartoon helped me understand finally!! I was lost, but now understand. Thank you!!!!! More examples like this!!
Looking for a good options screener/scanner - check Options Samurai - bit.ly/3bfS8p8 - It helps me find winning trades, time and again. Amazing tool! Also, feel free to reach out for a 1-on-1 call about options.
Trading has not been going well with me, I have invested a lot of time and failed, I traded on my own but each time I keep losing money, I don't have good strategies towards the market.
I have a reliable and trustworthy broker, Madame Stacy Griffin has been helping me with my trades, she is good at what she does and has a lot of people she works for and help make profit.
Thank you for education. When security price moves against you and you are forced to buy security, one can start selling out of money call option and repeat the process of generating regular income.
Hi Rick, can you make a video on the last part where you mention "you could always close your trade and buying back the identical option " I don't understand what you mean. Do you mean I buy a put after selling a put ?
I'm not Rick, but have done this. When you sell a put, someone has to buy it. You have "sold to open" a put contract. Later, if you decide to get out of this put contract you would buy a put ( "buy to close"). You sell, then buy back and its all gone. It's just a matter of clicking on the sell or buy button. If you tried this, these choices would be clear on your broker's website.
This video is good one. I watched two videos on Put options before this video and I was confused as before. I was still confused watching this video animation of the coffee Put buyer and seller and I watched animation, twice. The "light" didn't come on for me until further explanation using the Apple stock. I guess I needed both illustrations to get the how and why of Put options.
Rick , the content of your video on selling Put Options is excellent. Thank you, it is very clear. Now, i suppose that the opposite strategy ie. selling CALL option works for low quality Equities and still make tons of weekly income ! Your comments ? I am thinking of meme stocks like GME, AMC... with very poor fundamentals and high implied volatility
In the worst case scenario loss is unlimited with selling calls, as stock price can go up indefinitely. Maybe you’d get stable income for a while but one bad trade could wipe all that out.
I dont buy/sell put options yet, I watched the video a few times, now understand everything except the last segment, any ideas of a different presentation I can watch to see if I can understand it better? Thank you.
Rick I was watching your video on selling naked puts and I heard you mention setting bracket orders for saftey reasons, TP or SL is that possible with naked puts? If so I'm sure like myself others would love to know how to do it. Maybe you could make a video and explain how it's done. Thank you I've certainly learned a lot watching your videos.
Thanks so much for your kind words! Profit taking and stop loss orders are certainly possible on short puts and multi leg strategies. The limitation is the brokerage (many don’t support it). My favorite is Interactive Brokers, and they do!
I never thought I'd look at these videos and understand anything, going into the market has been life changing. Working 9-5 for 10 years only discover passive income 4 years ago. I worked my butt off for me family and I regret nothing but receiving $20k-$26k a month from good stocks and fx trust me they is no better retirement plan than this
I don't even want to get into details but I'm drained mentally and financially the reoccurring losses I've had to deal with is painful I mean I do everything right according to the videos and article I read online but I still can't turn a profit. What's your strategy? I need a better way to trade and make profit
@@rayneraltunok I find people get surprised when I share how easily I manage my stock portfolio and accounts, they think tirelessly at it. Truth is I leave the numbers and all my trade affairs to my Licensed pro analyst, 4 years ago when I started investing in stocks & bonds I partnered with a Financial advisor/Portfolio manager Mr. Leonard Bracher, he suggested I bought some stocks that he knew would yield valuable profits and he also forecasted that these companies will triple their net-worth in a space of 4 years. I did not regret taking his advice because I've made over $1.5 million net profits over the years. I started with $40k back then and kept increasing my capital as i earned more.
Loved the content of this video, thank you! Wish you provided an example about or expanded upon “buying back the identical option”. At 17:30 it’s “lose”. Again, thank you for explaining this complicated subject in easy to understand terms.
Great video! Explained very slow and totally informative!! Thank you for taking your time when you speak… gives us time to comprehend what’s being said on options! Lol great stuff!
Excellent question! I prefer Interactive Brokers for selling options. It’s cheap, and has the best order execution (fill rate). As for finding options to trade, I use Option Samurai daily- rickorford.com/samurai
The bid price is generally what you’ll get right away- during trading hours. If you’re patient, you could consider the midpoint, Regardless, I always use a limit order!!
Yes I have- rarely though. These days I use an options scanner bit.ly/3bfS8p8 to identify options with a high possibility of expiring worthless. Admittedly, I've made some serious mistakes selling put options - for example, when the market goes south, and buying back the option too soon. Today, I know better... rolling the option can be a great way to fix a broken trade!
That’s a pretty good explanation and fairly simple to understand. I don’t like that you didn’t explain if a stock drastically drops in price that the contract will be ridiculously expensive to buy back. Also it would be nice to tell people to learn the Greeks so they understand how the options get their value. How to play implied volatility And what Delta and theta do to the options value based upon the price movement of the underlined asset. I understand your apples scenario but I don’t like it because you’re telling people they’re making more than 3% on their collateral in a months time on selling an Apple option that’s very unlikely. You did bring up good points and explained how they work fairly well. But I think you absolutely have to cover the large amount of risk yes the underlining assets price moves against you and how to get out of the contract before that happens by buying it back more expensive than you sold it if you change your mind on owning it. For beginners or less experience people covered calls are safer but people have to know that they can Cap their upside potential
Thanks for the comments! I absolutely agree that a video about “how and when to close a trade” is important. I’m working on a “kicking the can” method and it’ll be out in Mid-late October. Stay tuned!
@@RickOrford sounds good to me you know you’re stuff. I’ve been trachba few people options and it’s amazing how little people know and some of them have been trading options for a while, nobody seems to want to educate themselves they just want to hit big. I say it’s better to be consistent rather than lucky
Thank you for that very helpful informative and slow description. So many others just zoom through so fast I can't have time to absorb and comprehend. Your pace was excellent.
I believe you are mis speaking at 14:19. When you sell the put you are risk of buying a stock for much more than its worth in the case the price falls because you agreed on the strike price .
Your option will not be assigned unless it is below your strike price. On expiration if the put option is at the above your strike price you will not have to take assignment of the shares.
@RickOrford Thanks for the video and sharing knowledge in simple but effective ways. question: At the end of the video, when you are talking about buying back option at a lower price, do you actually mean "buy to close"?
cool video. I already sell puts.. I actually just run the wheel strategy which I figure you know what it consists of.. im always looking for more ideas on new stocks to sell puts on, that's really the only reason I search put selling videos..
Hi Rick, at the beginning of the video you mentioned that not to sell put options on a commodity. Why not? I think we can make profit by selling put options on Silver , Gold.
no website or video has accurate answers when I need to own 100 shares before I buy sell options. Glad this video is the same. Just goes off on coffee beans
Hi - You don't need to own any shares to sell put options. To sell put options, you only need enough capital to buy the shares in the event you're assigned. Let me know if you have any questions!
I am a bigger. Can you sell covered call and sell put during the same expiration date. So, you may collect both premium ? What is the typical margin requirement for this strategy ? Thanks.
HI Rick, I don't get your slide at 14:20, it doesn't seem to make sense. Do you mean that the risk with selling puts is that you might be forced to buy an equity for more than it's market value at the expiration date? (Being forced to buy something for "less than what it's worth" to me doesn't seem to be a problem...
Hi, Rick, Nice video! Just one question about Samurai option tracking tool - what is the advantage over brokerage firm platform like thinkor swim, since I see all the option data and indicators are available in ToS ?
Option Samurai is a clear and easy to use platform. I tried TOS- it wasn’t for me. I much prefer Interactive brokers as a trading platform- and they give me the percentages (ie max loss) that I like to see. But when it comes to scanning for opportunities- I haven’t found something easier than Samurai.
A question for you. If I know the stock price is on down for sure. Can I sell the put option at higher strike than current stock price and buy it when the price goes down further. Is it a winning startegi? DS
If you sold a put option at a higher strike than the stock price, you’d already have assignment risk. The option would be “in the money”. If the stock went down further, it would be even further “in the money”. If I were hoping to profit from a stock price going lower, I’d buy a slightly out of the money put option (stoke price lower than the stock price). Hope this helps!!
Hey Rick, say if you sell put APPL AT $170 expiring Jan 20, will I be forced to buy the stock, if the stock go down, or plunge before Jan 20. Your answer is appreciated.
Yep - if you sold an AAPL 170 put expiring Jan 20, and AAPL is under $170 at expiration, you'll buy 100 shares AAPL * the number of contracts - for $170 a piece.
Hi, I have to trouble you again. I sold a put at strike price $111.50 expiring Jun21 with premium $0.66. The stock price has gone up to $132.00. Do I have to buy back a put to close it, the price is $0.15. Will the extrinsic value go down to zero if I wait until expiry? I would like to own these shares. What happens it I do not close the position? Once again appreciate your advice. Many thanks.
You could crystallize your profits and close it out at $0.15, or, let it (potentially) expire worthless! That’s up to you! Ps: have you joined my discord?
Making the first 100k has been a marathon, I am 26 and at 75k mark, No useless spending, just work, save and mostly trading, thanks to my fiduciary Mr Arlto Eric, I am blessed and I believe I will keep growing
If I sold a cash secured put on Apple for a Jan 2022 $100.00 strike on this market pullback and Apple ripped up could I buy the contract back right away and rise and repeat?I want to sell premium on the 2022 contracts to be safe and get a larger premium any thoughts or advice?New to options.
Sure! You can close your position, any time, by buying the exact same put option back! My preference is to sell options 3-6 weeks out, but it’s not a rule!
@@RickOrford I would like to see you do more video's on cash secured puts if your basing your trades off technical analysis and chart patterns?Also the credit when you first receive does that fluctuate when the stock moves up and down or is it locked in cash balance?
@STOCKBOY7254 Thanks for your kind words. There are other channels that specifically offer their methods for selling put options for monthly income. For the time being, my focus isn't specifically on trading, rather, it's spread out over various topics- saving, budgeting, investing so that one day, you might become financially independent. Check out my blog, thefinanciallyindependentmillennial.com/ and you'll see what I mean! As for the credit (option premium), it's yours to keep and reflects in your cash balance the moment you sell the option. The credit does not fluctuate after the sale. Last, do *_check out my video on selling covered calls!!!_*
Hi Rick, Awesome video, thanks so much for posting and for the tips such as not to sell the underlying if the option was executed and the prices is low. Indeed it takes some time to wrap your head around the whole logic, but you made it quite easy to follow. I am wondering are there strategies to sell before the expiration date 🤔 +1 subscriber, will catch up on your other videos as well.
Glad it was helpful - it means a lot you subscribed! Regarding your question - to close out a put sale, you'd simply buy back the very same option with your broker. That would be a "buy to close" order. Same underlying, same expiration and same strike price. Hope that helps!
Listened to this again. So if I wanted to buy a stock and want to buy at a cheaper price and am in no hurry, I could sell a put option for it at the reduced price and hope it gets put? This way, I get the premium and get to buy the stock at the lower price. The only drawback here would be if the price does not hit the strike price and I do not get to buy the stock. The upside is that I would enjoy the premium. Right?
So quick question- when you sell a put, can you close out of the option before the expiration date? Like if i say the expiration date is tomorrow and I wanted out, could i do so before expiration date with any penalty?
Yes you can sell before the expiration. You can sell a few and hold the rest. Or just sell all of your options. You just can't buy and sell more than 4 times on the same day or you'll be labeled a pattern day trader and get restricted for 3 months.
🔥 Join me on Discord: discord.gg/F2UmNw7W
Can someone outside of the US join you on Discord?
Absolutely!
@@RickOrford I couldn't login Discord on my laptop because I installed Discord app on my mobile as well with the same mobile number. I have to wait for support to remove the mobile number from my app.
Having a working trading strategy is far the most important step to becoming a successful trader. I have tried multiple unsuccessful methods in the past but so far I’m making progress with professional help.
Herman Jonas, an astute trade analyst is the brain behind my success. I've gotten into a plethora of assets with $44k spread across stocks (options and futures) for the short term and Roth IRA, index funds, and ETFs, for the long term. Now I sit back, and just reinvest at intervals while I handle my other businesses.
That's your view. In my experience, there is no such formula, It is nearly impossible to achieve success with trading. It’s all just gambling.
Best to start by knowing your chances of profit before doing anything!
How can I reach him, please? I'm buoyed by the good recommendations I’ve come across elsewhere. I need help with my trades. I'm ready to pay for his services.
Your assistance was helpful. I was able to have a conversation with him via mail. What's even better is that he's certified with a registered broker. I'm getting started right away!
Hi Rick, Phenomenal job. My favorite tip was at the very end, the 'buy to close' option to buyback that contract you sold and potentially double dip on that same date with another contract. Please ask users to watch out for brokerage fees. To buy it to close, you might still have to pay a transaction fee which could be up to $10 or so. Something to consider rather than letting it ride out to expiration which will not incur another transaction fee.
Please double check your comments at 14:16. I think you meant that you might be forced to buy something "for much more" than what it's worth. Using your Apple example you are buying something for $130 that's only worth $120 (so 130 is much more than what it's worth). I also agree with your opinion to only buy something you want to hold because that Apple stock will (likely) eventually return to 130 so you don't really lose. Thanks again for this really thorough and clear video!
Thanks for the kind words, Dave! You’re right, brokerage fees can eat in to profits; and the statement about “being forced to buy something for much less than its worth” could be clearer. Indeed, if the underlying equity falls below the strike price, the investor will be forced to buy the equity at the strike- and that equity will certainly be worth less than the price paid. Stay tuned for a follow up :-)
@@RickOrfordwouldn’t the put buy back be more expensive now since it’s in the money
@@DeezNutsInYourMouth101 That's the risk. If the stock moves below the strike, the put will be in the money. You could buy it back, and sell one with a lower strike (known as rolling) to help offset the loss.
Thanks for the education - I saw couple of other clips, you explained in a way that is easy to understand, keep it up!!
Put option, well that sounds great, but I will prefer buying more Bitcoin right now.
Yes you are right! Bitcoin trade is the best investment anyone can ever imagine and the profit is huge, believe me this is the best time to invest in it based on the current market status
I have been researching all this while for a digital asset to invest in and i found forex trading to be the most profiting of them all, I'm definitely bouncing on
venturing into Bitcoin trade with an expert trader that has adequate orientations about signals 📈 ensures great profits within a short period of investment
I have thought of it that way, but still worried of what to do now.
Nice video with good info on put option, It is really helpful to us traders, but Investing on crypto is the best and fastest way of making money, but only few understood the secret of crypto.
Excellent education. You are a really really excellent teacher for a 72 year old person like me. You speak slowly and clearly and explain in simple terms. You are definitely the best teacher on this subject. You have made me a few thousand dollars in the last few weeks. God bless you and keep this channel and reaching the lives of other people.
Thanks for the kind words! Appreciate the support 😀
I understood selling puts before watching your video, but I really like the coffee bean example. It just brought everything together for me.
Thanks Craig!
Great explanation and fantastic use of analogy with coffee. I'm based in Toronto Canada and was introduced last year to generating income from selling naked put options and covered calls on stocks that I would love to own anyways. It's been great in a bull market, although in a bear market with higher premiums due to higher volatility It's been challenging. However it's been a great experience and ride.
what are you talking about tony? You are the one collecting the premiums so why isn't higher better?
@@Bbfanatic You can only sell puts when you have capital to buy stocks if assigned and if you don't have capital on hand and can't sell puts, you can't collect premiums. Collecting premiums selling covered calls is ideal in a bull market or when the market is up.
Well this is by far the simplest and clearest video explaing PUT options. Thank you !
I just started doing covered calls and I love it. My bank was paying me less than twelve dollars a year now I make $1200 a week selling covered calls just the opposite to puts but same principal . Your video explained the put process great!
Thanks for the kind words!
Sir, you are the GOAT. I've been trying to understand options since July, and it took me a month to actually understand selling calls (no giggling please). You're video was simplistically, brilliantly understandable, and I feel secure enough in my understanding of selling puts to actually give it a try! Cheers!
Thanks for the kind words 👍🏻
Just before you gave plan B, the question raised in my mind whose answer was plan B!!! Perfect timing. Thanks very well explained.
Glad it was helpful!
I like the tip about buying back the put options to close out the trade.
I really liked the Sally and Jimmy scenerio! It helped me "get it!" I'm interested in options trading, specifically selling Puts and this helped tremndously. TY!
Thanks kindly! Considering this was one of my first videos, please also have a look at one of my latest and let me know what you think 🚀 How to Select Put Options to Sell: Expert Guide
ruclips.net/video/PLSIcLhF6zw/видео.html
Hey! Wow, this is all I needed to understand! Could you make a video explaining the options! Thanks a lot…
Thanks for the request. Can you elaborate on “explaining the options”? What do you mean?
Great explanation! Easiest method of explaining it that I have ever seen.
Thanks!!
The only options I trade are cash secured puts on stocks i have in my portfolio and I use premium to accumulate more shares
It's often a solid trade!
Very good teacher. Speaks slowly, relaxed and happy person.
Thanks for the kind words!
Outstanding. Excellent explanation of what selling a put option is. 👍
Thanks! Very kind!!
I am glad finding this clip and seeing someone doing exactly the same thing that I am doing. You are hitting the very key point: “pick a underlying quality stock that u really want to own”.
A few additional points I would like to add:
1. I also use technical analysis to open the positions when the stock is in RSI overbought region.
2. Use “roll out” strategy when the option is in the money (losing money) to wait for the quality stocks to bounce back up.
Using these combination of sell put strategy has increased my winning rate dramatically and making a very profitable weekly income around $8k to $12k.
There are others doing sell put but seldom hear others use sell put to get out of trouble. Like to hear feedback from others with respect to that
I meant to use “roll out” to get out of trouble
Thanks for the kind words. Absolutely, 100% missing is something about rolling and using technical analysis to help with decision making. I’ll have to make another video about it!
Rick - Great video. But just and FYI @14:16 - as a PUT option seller, you might be forced to buy something for much more (not much less) than what it's worth.
Thanks Rick! Just started doing this!
Great video! But, in the "real life examples" section the written explanation can be confusing for a beginner. When I first started selling puts I had a better understanding of the relationship between the buyer and seller when someone told me that the option seller was selling a "contract". I think if you inserted the word "contact" between the words "option" and "seller" it would bring more clarity to someone who is just getting started. I know it was a light bulb moment for me when I first started out. I love the cartoon illustrations! I'm a visual learner, and a successful high school drop out also. Thank you for the videos. Please keep them coming. 👍
Ok, you earneed the credit, the video is nice to watch, your style is simple and straight forward, I have not sold options yet, I like to buy good quality stocks. I think I am going to watch more of your videos in order to learn more before I sell any put options. The best part of this video is your emphasize to sell put options on good quality stocks or etf, not just any stock. My son is about your age, I think I am going to send him the link to your youtube channel, he is like me, invests only in quality stocks and mutual funds, and selling put options could be a side money maker.
Thank you for this video.
Thanks for your kind words. Yes, selling puts should only be done on stocks you’d actually want to own- as you might end up getting assigned at some point! Happy to answer any questions along the way!
Very good breakdown. Best video I’ve seen yet as a beginner
I’ve sold puts, it works. Make sure, just like he said, that you sell puts on a stock that you wouldn’t mind owning anyway, and it has to be quality, not some risky junk stock that may never go back up. This way, you’ll sleep well knowing you own quality, even if you paid a little more than what it’s currently worth.
I’ve watched endless videos on this subject and still remained confused. Many videos seemed to contradict each other. However, your explanation with the coffee bean cartoon helped me understand finally!! I was lost, but now understand. Thank you!!!!! More examples like this!!
Thanks for the kind words!
Very nicely explained, very useful information. Thank you!
Glad it was helpful!
Thank you! This was a great educational, easy to understand, video!
Glad it was helpful!
Very well done explanation! I am going focus on high quality stocks rather than just the highest premium.
Boom!
I'm a visual person and your animated video is so easy easy to comprehend. Thank you.
Thanks for the kind words!
I watched so many videos related to the PUT option. Yours is the best.
Thank you!
Thank you - How the way your explanation make me understand
Thanks Dany!
Looking for a good options screener/scanner - check Options Samurai - bit.ly/3bfS8p8 - It helps me find winning trades, time and again. Amazing tool! Also, feel free to reach out for a 1-on-1 call about options.
Trading has not been going well with me, I have invested a lot of time and failed, I traded on my own but each time I keep losing money, I don't have good strategies towards the market.
Self trade is too risky if you don't have the knowledge and strategies on how to trade and read margins.
You need a good broker, someone that will make trades and Profits for you and also teach you how to trade and follow the market strategy
How can I get a real broker? there are a lot of fake brokers and sites and I don't want to loose my money.
I have a reliable and trustworthy broker, Madame Stacy Griffin has been helping me with my trades, she is good at what she does and has a lot of people she works for and help make profit.
I think I have heard about this Mrs Stacy Griffin, a colleague of mine told me about her last month but I was afraid to make contact, how's she?
Good video, thinking to start doing it. Thanks
Rick, I'm your new fan. Simple and informative, learned so much already. Thanks a million!!!
Thank you for education. When security price moves against you and you are forced to buy security, one can start selling out of money call option and repeat the process of generating regular income.
Correct!
Thanks for the video Rick, very well done.
I would not deviate from this instructional format.
Hi Rick, can you make a video on the last part where you mention "you could always close your trade and buying back the identical option " I don't understand what you mean. Do you mean I buy a put after selling a put ?
I'm not Rick, but have done this. When you sell a put, someone has to buy it. You have "sold to open" a put contract. Later, if you decide to get out of this put contract you would buy a put ( "buy to close"). You sell, then buy back and its all gone. It's just a matter of clicking on the sell or buy button. If you tried this, these choices would be clear on your broker's website.
This video is good one. I watched two videos on Put options before this video and I was confused as before. I was still confused watching this video animation of the coffee Put buyer and seller and I watched animation, twice. The "light" didn't come on for me until further explanation using the Apple stock. I guess I needed both illustrations to get the how and why of Put options.
This is what they call plain good english, in layman's term. Thank you very much!
Glad you liked it!
Rick , the content of your video on selling Put Options is excellent. Thank you, it is very clear. Now, i suppose that the opposite strategy ie. selling CALL option works for low quality Equities and still make tons of weekly income ! Your comments ? I am thinking of meme stocks like GME, AMC... with very poor fundamentals and high implied volatility
In the worst case scenario loss is unlimited with selling calls, as stock price can go up indefinitely. Maybe you’d get stable income for a while but one bad trade could wipe all that out.
I dont buy/sell put options yet, I watched the video a few times, now understand everything except the last segment, any ideas of a different presentation I can watch to see if I can understand it better? Thank you.
I don't sell Putt Options as of yet but I am going to start, lol. Thanks for the information.
So well done! You have really helped me wrap my head around this, thank you and now subscribed 👍
Thanks for the video. It was very helpful.
Finally a video that's for me ... thanks for the visual
Rick I was watching your video on selling naked puts and I heard you mention setting bracket orders for saftey reasons, TP or SL is that possible with naked puts? If so I'm sure like myself others
would love to know how to do it. Maybe you could make a video and explain how it's done. Thank you I've certainly learned a lot watching your videos.
Thanks so much for your kind words! Profit taking and stop loss orders are certainly possible on short puts and multi leg strategies. The limitation is the brokerage (many don’t support it). My favorite is Interactive Brokers, and they do!
I never thought I'd look at these videos and understand anything, going into the market has been life changing. Working 9-5 for 10 years only discover passive income 4 years ago. I worked my butt off for me family and I regret nothing but receiving $20k-$26k a month from good stocks and fx trust me they is no better retirement plan than this
Well said. Passive income is still the number 1 way to build wealth, especially on the long term
I don't even want to get into details but I'm drained mentally and financially the reoccurring losses I've had to deal with is painful I mean I do everything right according to the videos and article I read online but I still can't turn a profit. What's your strategy? I need a better way to trade and make profit
Patience and consistency will always be rewarded by the market. I'm glad its working out well for more and more people everyday.
@@rayneraltunok I find people get surprised when I share how easily I manage my stock portfolio and accounts, they think tirelessly at it. Truth is I leave the numbers and all my trade affairs to my Licensed pro analyst, 4 years ago when I started investing in stocks & bonds I partnered with a Financial advisor/Portfolio manager Mr. Leonard Bracher, he suggested I bought some stocks that he knew would yield valuable profits and he also forecasted that these companies will triple their net-worth in a space of 4 years. I did not regret taking his advice because I've made over $1.5 million net profits over the years. I started with $40k back then and kept increasing my capital as i earned more.
Impressive numbers! But its REITs and crypto for me.
Loved the content of this video, thank you! Wish you provided an example about or expanded upon “buying back the identical option”. At 17:30 it’s “lose”. Again, thank you for explaining this complicated subject in easy to understand terms.
Thanks for the kind words! Ill be recording a follow up video in the next month- I’ve been getting so many requests!
Great video and illustrations. Very clear break down.
Great video! Explained very slow and totally informative!! Thank you for taking your time when you speak… gives us time to comprehend what’s being said on options! Lol great stuff!
Thanks for the kind words!
How do you determine the strike price of the option you sell? How far out of the money?
what platform do you use to operate the options and how much do they charge per order?
Excellent question! I prefer Interactive Brokers for selling options. It’s cheap, and has the best order execution (fill rate). As for finding options to trade, I use Option Samurai daily- rickorford.com/samurai
When placing a sell puts should I go for bid mid or the ask price?
The bid price is generally what you’ll get right away- during trading hours. If you’re patient, you could consider the midpoint, Regardless, I always use a limit order!!
Great straight forward and clear explanations/examples. Thank you
Thanks James! It’s an old video but the rules haven’t changed!
I just converted my cash account to a margin account to write put options. Good solid video. Have you ever had any of your written options exercised?
Yes I have- rarely though. These days I use an options scanner bit.ly/3bfS8p8 to identify options with a high possibility of expiring worthless. Admittedly, I've made some serious mistakes selling put options - for example, when the market goes south, and buying back the option too soon. Today, I know better... rolling the option can be a great way to fix a broken trade!
Just started today, thank you found this video extremely helpful 👍
Thanks and good luck!!!
You have a good teaching style.
When you say selling are you talking about ("creating a put option to sell pieces to others who can then resell)?
WOW!! Luv it, Ty, Ty, Ty... Just subscribed. You "Rock". Will be catching ur channel. Have a good night Rick;) We all thank you!
Thanks for your kind words!! Sorry for the delay getting back to you!
That’s a pretty good explanation and fairly simple to understand. I don’t like that you didn’t explain if a stock drastically drops in price that the contract will be ridiculously expensive to buy back. Also it would be nice to tell people to learn the Greeks so they understand how the options get their value. How to play implied volatility And what Delta and theta do to the options value based upon the price movement of the underlined asset.
I understand your apples scenario but I don’t like it because you’re telling people they’re making more than 3% on their collateral in a months time on selling an Apple option that’s very unlikely.
You did bring up good points and explained how they work fairly well. But I think you absolutely have to cover the large amount of risk yes the underlining assets price moves against you and how to get out of the contract before that happens by buying it back more expensive than you sold it if you change your mind on owning it.
For beginners or less experience people covered calls are safer but people have to know that they can Cap their upside potential
Thanks for the comments! I absolutely agree that a video about “how and when to close a trade” is important. I’m working on a “kicking the can” method and it’ll be out in Mid-late October. Stay tuned!
@@RickOrford sounds good to me you know you’re stuff. I’ve been trachba few people options and it’s amazing how little people know and some of them have been trading options for a while, nobody seems to want to educate themselves they just want to hit big. I say it’s better to be consistent rather than lucky
Thank you for that very helpful informative and slow description. So many others just zoom through so fast I can't have time to absorb and comprehend. Your pace was excellent.
Thanks for your kind words!!
I believe you are mis speaking at 14:19. When you sell the put you are risk of buying a stock for much more than its worth in the case the price falls because you agreed on the strike price .
Your option will not be assigned unless it is below your strike price. On expiration if the put option is at the above your strike price you will not have to take assignment of the shares.
@RickOrford Thanks for the video and sharing knowledge in simple but effective ways. question:
At the end of the video, when you are talking about buying back option at a lower price, do you actually mean "buy to close"?
Yep, you’d issue a buy to close order to close out your short option!
excellent video. very well explained.i loved the drawings, really added context to your words.
Thanks!
cool video. I already sell puts.. I actually just run the wheel strategy which I figure you know what it consists of.. im always looking for more ideas on new stocks to sell puts on, that's really the only reason I search put selling videos..
Thank you, that was very helpful.
You're welcome! Please feel free to have a look at my follow up: m.ruclips.net/video/PLSIcLhF6zw/видео.html
i love selling covered call options and occasionally selling put options
The way you explain is very clear. Well maybe because I have learn options before.
Thanks!
Hi Rick, at the beginning of the video you mentioned that not to sell put options on a commodity. Why not? I think we can make profit by selling put options on Silver , Gold.
@inanutshellreviews77 if you’re a commodity expert- go for it! But for those just starting out, it might not be the best idea.
@@RickOrford I'm not commodity expert Rick, only stable commodity like SVL & GLD.
Thank you very much...
My favorite strategy 🙌🏽
no website or video has accurate answers when I need to own 100 shares before I buy sell options. Glad this video is the same. Just goes off on coffee beans
Hi - You don't need to own any shares to sell put options. To sell put options, you only need enough capital to buy the shares in the event you're assigned. Let me know if you have any questions!
I am a bigger. Can you sell covered call and sell put during the same expiration date. So, you may collect both premium ? What is the typical margin requirement for this strategy ? Thanks.
Ohhh I need to ask you a few questions, I own 100 shares of a stock what's the best way to utilize my holdings for income
You can sell covered calls!
How about joining me on my discord? We can chat more there 🚀 rickorford.com/discord - see you there!!!
HI Rick, I don't get your slide at 14:20, it doesn't seem to make sense. Do you mean that the risk with selling puts is that you might be forced to buy an equity for more than it's market value at the expiration date? (Being forced to buy something for "less than what it's worth" to me doesn't seem to be a problem...
Thanks
Very well explained. Thanks
for ex. sold put of 130 at $400, apple came from 135 to 131, to avoid any assignment, have to buy back put at higher price ?
Hi 🙋♀️,
I never did well in the public school system. It takes both of us~~•
Hi, Rick, Nice video! Just one question about Samurai option tracking tool - what is the advantage over brokerage firm platform like thinkor swim, since I see all the option data and indicators are available in ToS ?
Option Samurai is a clear and easy to use platform. I tried TOS- it wasn’t for me. I much prefer Interactive brokers as a trading platform- and they give me the percentages (ie max loss) that I like to see.
But when it comes to scanning for opportunities- I haven’t found something easier than Samurai.
Hi Rick,you did an excellent job on this video with detail examples,it is very easy to understand,thank you very much. JAMES
Glad it was helpful!
Do you also have to buy the stock along with the premium?
Great question! Selling cash secured puts means you have the cash if assigned!
Thanks for video and nice explenation.Did you made a video about buying PutS?
Sure- you can check out Leaps Options Trading Strategies - How to Profit In a Bull Market
When dos the cash flow ? at expiration ?
A question for you. If I know the stock price is on down for sure. Can I sell the put option at higher strike than current stock price and buy it when the price goes down further. Is it a winning startegi? DS
If you sold a put option at a higher strike than the stock price, you’d already have assignment risk. The option would be “in the money”. If the stock went down further, it would be even further “in the money”. If I were hoping to profit from a stock price going lower, I’d buy a slightly out of the money put option (stoke price lower than the stock price). Hope this helps!!
Hey Rick, say if you sell put APPL AT $170 expiring Jan 20, will I be forced to buy the stock, if the stock go down, or plunge before Jan 20. Your answer is appreciated.
Yep - if you sold an AAPL 170 put expiring Jan 20, and AAPL is under $170 at expiration, you'll buy 100 shares AAPL * the number of contracts - for $170 a piece.
Hi, I have to trouble you again. I sold a put at strike price $111.50 expiring Jun21 with premium $0.66. The stock price has gone up to $132.00. Do I have to buy back a put to close it, the price is $0.15. Will the extrinsic value go down to zero if I wait until expiry? I would like to own these shares. What happens it I do not close the position? Once again appreciate your advice. Many thanks.
You could crystallize your profits and close it out at $0.15, or, let it (potentially) expire worthless! That’s up to you!
Ps: have you joined my discord?
Rick is like a friendly robot trying to help me make money
I aim to please :-)
nice and clear. thank you so much.
You’re most welcome!
Making the first 100k has been a marathon, I am 26 and at 75k mark, No useless spending, just work, save and mostly trading, thanks to my fiduciary Mr Arlto Eric, I am blessed and I believe I will keep growing
Thanks for this valuable content!
Thanks for the kind words!
If I sold a cash secured put on Apple for a Jan 2022 $100.00 strike on this market pullback and Apple ripped up could I buy the contract back right away and rise and repeat?I want to sell premium on the 2022 contracts to be safe and get a larger premium any thoughts or advice?New to options.
Sure! You can close your position, any time, by buying the exact same put option back! My preference is to sell options 3-6 weeks out, but it’s not a rule!
@@RickOrford I would like to see you do more video's on cash secured puts if your basing your trades off technical analysis and chart patterns?Also the credit when you first receive does that fluctuate when the stock moves up and down or is it locked in cash balance?
@STOCKBOY7254 Thanks for your kind words. There are other channels that specifically offer their methods for selling put options for monthly income. For the time being, my focus isn't specifically on trading, rather, it's spread out over various topics- saving, budgeting, investing so that one day, you might become financially independent. Check out my blog, thefinanciallyindependentmillennial.com/ and you'll see what I mean! As for the credit (option premium), it's yours to keep and reflects in your cash balance the moment you sell the option. The credit does not fluctuate after the sale. Last, do *_check out my video on selling covered calls!!!_*
Hi Rick,
Awesome video, thanks so much for posting and for the tips such as not to sell the underlying if the option was executed and the prices is low. Indeed it takes some time to wrap your head around the whole logic, but you made it quite easy to follow.
I am wondering are there strategies to sell before the expiration date 🤔
+1 subscriber, will catch up on your other videos as well.
Glad it was helpful - it means a lot you subscribed!
Regarding your question - to close out a put sale, you'd simply buy back the very same option with your broker. That would be a "buy to close" order. Same underlying, same expiration and same strike price.
Hope that helps!
What about Put Option spreads?
Listened to this again. So if I wanted to buy a stock and want to buy at a cheaper price and am in no hurry, I could sell a put option for it at the reduced price and hope it gets put? This way, I get the premium and get to buy the stock at the lower price. The only drawback here would be if the price does not hit the strike price and I do not get to buy the stock. The upside is that I would enjoy the premium. Right?
100% correct!
So quick question- when you sell a put, can you close out of the option before the expiration date? Like if i say the expiration date is tomorrow and I wanted out, could i do so before expiration date with any penalty?
Yes you can sell before the expiration. You can sell a few and hold the rest. Or just sell all of your options.
You just can't buy and sell more than 4 times on the same day or you'll be labeled a pattern day trader and get restricted for 3 months.
Very good teacher
Thank you!