After a terrible 2022, shell-shocked financial backers have a lot to think about and losses to recover from. An expansion report and a wealth of other data did little to alter assumptions that the Central bank would likely keep raising interest rates regardless of whether the economy slows down. This implies that portfolios will experience more losses during the first quarter of 2023. I'm currently at a crossroads deciding whether to exchange my $250k security/stock portfolio; how might the continuous market volatility work to my advantage?
Concentrate on two main objectives. First and foremost, keep yourself safe by knowing when to sell stocks to reduce losses and maximize gains. Second, prepare yourself to gain from a market turnaround. I advise you to seek the advice of a representative or financial counselor
@@harrisonjamie794 In fact, ever since Coronavirus, I've been in regular communication with financial examiners. Nowadays, buying moving stocks is quite easy; the trick is knowing when to buy and when to sell. The section and leave orders for my portfolio are made by my counsel. accumulated more than $550,000 from a $150,000 savings that was initially stale.
@@harrisonjamie794 She is KRISTIN GAIL CUNNINGHAM , my consultant. Since then, she has devoted section and leave attention to safeguards that I have been keeping an eye out for. You can locate information about the chief online, on the off chance that you're interested. I made no regrets about substantially adhering to their exchange strategy.
@@DavidAntony-gq7id sincerely thank you I looked her up on the internet and was awestruck by how qualified she was; I contacted her since I need all the help I can get with canning. I've just scheduled a call.
out of everyone in youtube , your one of the most legit people i know that trades options and actually shows his portfolio thank you for motivating me 🙏
I realize that I'm late to the party, but this video is about to change my life. I can't wait to put your strategies to work starting right now! Thanks for producing such great content.
@@787beb0 Yes it does! I was already experienced in trading stocks, and now adding this PUT strategy, along with selling covered calls I expect to add an additional 10-20% to my yearly returns.
I'm brand new to options trading and trying to learn what I need to before I start risking money. Your channel is one of the best as far as pertinent, detailed information.
Bruh this guy is actually helping me understand it more, I like the detail he goes in to, with this stuff for me atleast it requires a lot of specific detail for me to understand it
Well this video didn’t age too well. However it’s an extremely helpful video in understanding selling put options. Selling puts does make one a better investor. It forces one to be patient and instead of just setting a limit order your also collecting the premiums
I made 19k last week using one of your strategies! Unfortunately, it was in my paper trading account!😔….will continue practicing!😉 Thanks for sharing 👏🏽👏🏽👏🏽
Nice presentation Henry. I took the Tesla put 500 and 475 @ 2 weeks out. Basically at the daily 250 MA and just below at major support. I hope I get assigned so I can sell some covered calls while holding for a summer swing trade.
Hello just need help if the stock hits below ur strike price sellin put call,does robinhood automatically buys the 100shares of stock since they held the collateral or they send u msg sayin u r assigned? My option expires on aug 20, hasnt received any msg frm . Shud I wait until Aug 20th which is tomm?
@@basantashrestha6245 u need to keep watching the stock price, if it will be near or lower than your strike price then either buy back or roll before the market close (I suggest at least 2-3 hours before to avoid any issue). Robinhood is not going to call you. They will assign 100% if stock price is equal or less than strike price.
You want the price of the put option to decrease. This will happen the most quickly if the stock price increases, but it will also happen if the stock simply remains above the strike price as you approach expiration.
Good video. I liked the real time demonstrations. I would recommend bringing down your exposure quite a bit, and maybe bringing down highlights and some other tweaks in video editing to make your video look more professional.
@@InvestwithHenry Wow unbelievable....I could care less about exposure and professionalism, the content is all that matters. I wouldn't worry about it Henry.
I would like to see how you manage these options trade. When do you close them out, and how to minimize the loss if the trade is going against the plan
Really cool strategy, I have 215 shares in Tesla which I wanted to keep forever, what conservative strategy would you consider? Just wanted 1% per month so about $2000 per month. Any ideas?
Selling covered calls would probably be your best bet. And if you're worried about getting assigned and losing your shares in some cases, you can just continually roll those calls to the next expiration cycle to avoid that...and also collect more premium!
Henry, thanks for your explanation of your Put option passive income strategy. I have some questions for you. Just so I understand, you are OK with your $175k investment only earning between 1% - 1.6% return per month on options premiums? I ask because even though the weekly premiums are lower, they add up to be worth more per month than the monthlies. My next question is this: Earning less than $2000 per month on whopping $175k capital, what are you planning on doing with your less than $24k per year in options premiums? I am curious because these premiums are being earned at a relatively slow pace. Do you use the premium money just to pay rent and things like that? Or are you slowly feeding the option premium money back into your investment pool to continue selling more monthly PUTs? Thanks.
Take that as 1 example, that 1% in premium is for a particular stock, particular strike, particular timeframe. All those variable will affect the amount of premium and this also comes with the probability of making that profit. You could diversify in some trades that targets 5% per week and some just 1% per month. Risk reward ratio.
Love your content. I’m familiar with how options work. My problem is knowing which stocks to pick. Can you do a video on how to select stocks for options? Thanks.
This is simple just look in your portfolio only sell options on stocks you really want to own for the long term this way if it gets exercises you get shares you already own at a discount if it does not you keep the premium free and clear
Great video. Only suggestion is in post move yourself from the portion of the chart you are talking about. At 18:23 you are talking about lines that your PIP is covering.
Hey Henry, I love your videos. Great stuff and thank you for the great work. Can I ask where can I join your community? I’m a wheels strategy trader too 😊
If I have a 330/325 FB Bull Put Spread, on expiration, FB stock price is 328. Will the broker 1) Assign the short leg and allow the long leg to expire? (And this will require capital) 2) Assign the short leg and exercise the long leg, therefore cancelling out each others and resulting in some loss ?
You will get assigned on the 330-strike short put. The 325 long put will expire worthless because it remained out of the money. So to avoid this rare but potentially dangerous situation, simply close your spreads before expiration!
Watching this after a year where all these stock have dropped between 50-80 % in value. can you make a video on the consequences of doing wheel strategy with these stocks and what happens when the price goes down? Thanks
i am a bit confused, you need the collateral(price of stockx100) to get the premium of x amount, does the collateral coke back or will you be losing that to gain the premium?
The collateral will be released once the trade is over IF the put option expires worthless. Otherwise, you'll be assigned 100 shares of stock, and the collateral will be used to make that purchase.
Pinned this video down, helped me when I started some months back but I lost money because I was gambling the market by myself but then it is the most lucrative investment I have now
Hey Henry, I am still trying to understand the whole thing. What should I do when a share is trading at its 52 weeks lowest price and I know that it it will go up in price in few months/years. Should I sell call or sell puts?
In this case you would sell puts. If you buy calls and the price drops, you lose money. If you sell puts at the money and the price falls, the contract expires worthless for the buyer and you, as the seller, keep the premium.
For short puts, I have found selling around the 30 delta has a good balance of risk to reward. About a 70% chance of profit and you still collect pretty decent premium.
what if the price moves against you? I was under the impression naked puts and calls are risky. would it not be less risky to use a credit spread strategy?
@Henry ㊉①②①⑨④②④②⑧⑨⑦ Thank you for the offer but this type of options trading is to risky for me. I am learning all about options trading but it was clear that naked trading that your did in your video is very risky. I would like to offer constructive feedback on your video. Maybe you should make it clear to people that naked trades like you are doing is high risk when in fact there are safer ways to trade options with probability trades of 75-80%, which uses less of your account capital and limited risk!.
Hey Henry when are you going to write a book about options. I never done it before and I feels a little nervous to that. I only have about one year trading buying low price and sell at high price. Is a little confused for me.
My first video with him. All he did was place the orders. I liked his tech analysis but the true test of him keeping any of the money has yet to be shown.
Looks like you may be owning some square! lol. It dropped a lot today, but overall the chart shows Square consistently rising over time! Price will probably jump up a few dollars tomorrow.
If the stock is above your put strike by expiration, you keep the full premium. You can also buy back the put before expiration if the price of the contract falls substantially. You will make the difference in your sell and buy prices as a profit as well.
@@CursedWarrior100 I think you meant to say in the money? All puts with strikes above the current stock price are in the money. And no, I don't see any reason to sell these. You'll collect a much larger credit obviously, but if you get assigned, you'll just end up giving most of it back.
@@scottreesetradinginvesting7936 my only thing is... my stock is 1.10. I sold a $5 put (to see what would happen). It list current prince as $4.95 while the stock is down at $1.06. So would it get assigned when that option price hits $5 or the actual stock? Robinhood sucks when it comes to clarity lol
@@CursedWarrior100 You run the risk of early assignment if there is no more extrinsic value remaining in the contract. With the stock at $1.06, that $5-strike put option has $3.94 of intrinsic value and $1.01 of extrinsic value....just going off the $4.95 price that you mentioned. So right now, there is hardly any risk of early assignment. I also have a video that takes a deep dive into early assignment risk as well in case you're interested... ruclips.net/video/CX9B-qPJmMM/видео.html
Amazing video, can we do the same but instead of selling puts, selling credit spreads for those who have less capital? Thank you keep up the great work.
You have to factor in the probability of profit though. Yes you may be risking $100 to make only $25, for example, but you might have an 80% chance of making that $25.
What happens if you sell a put option with a strike price above the stock's price? I see ppl get strike prices under stock's price which makes sense, but im just curious when the strike price is already above. Do u get assigned right away at the stock's price or strike price? Or nothing happens
You will not get assigned right away. However, as long as the option is in the money, there is a greater risk of getting assigned early. But this would only occur if there is no extrinsic value remaining in the contract. I have a video that takes a deep dive into this topic if you're interested... ruclips.net/video/CX9B-qPJmMM/видео.html
That's one way you can defend a trade. You can also buy back the put option at any point to cut losses. Or you can try shorting shares of stock, which is what I do.
Hi great video however i would like to ask. Assuming you sell puts and the stock price reaches your strike and you have to buy the stocks isnt it possible to just sell your stocks back and keep your money having a slight loss compared to the premium you would’ve gotten assuming the trade went in your favour
Ya this is exactly why selling puts is a terrible idea to try and create a passive income stream for yourself. They're a great investment tool for the long-term, but making "quick and easy" profits all the time is a fantasy.
Henry, thank you for the video! What would you recommend though for someone with only a $500 account to start? I do not have the capital to put up like you do unfortunately but I will get there eventually with enough learning and practice
I"m new to all of this, but my first "test run" got me $7. So this really works. I don't have enough funds to do a whole bunch of these at once yet. But i hope to one day. I am confused on something. I was just looking at GoPro. if its at $4 a share, and i write a put for $1, does another investor have to buy my put before I get the premium? Do i get nothing if it expires without a buyer?
Hi Henry, I did (by mistake) a Put with Buy To Close of 14 options of AAPL with premium of $2.69 - a Strike of $170 and expire in 4 days (Feb. 4). I think, to close this position, I need to do a Sell To Close. My question is what should I look for Bid and Ask - should it be higher than $2.69 so I don't lose money? Thanks a lot in advance!
Thanks for all your knowledge and insite your giving to the streets. I have a question regarding the collateral. Is that coming from your buying power because your collateral is so much higher then you profit. Thanks again for your prospective on this subject.
You only sum the potential premium earned at expiration but the total required buying power for all those cash secured puts is huge. Requires a > 100K account.
Henry, when looking at Peloton what did you mean by the "2 green lines" indicating that buyers were starting to come back in? Your camera feed is situated in the bottom righthand corner so it's covering the most recent price action and technical indicator values. I can't see what "green lines" you're speaking about. Are you talking about the two bottom Bollinger bands or something else?
Great video, easy to understand. However, why would you not put in the ask price when selling a Put to collect maximum premium. I would think you should have your limit price at "Ask price" when selling a put to Open and "Bid price" when you are closing out with a Buy. Can you clarify?
@@kylesteiner4158 but you don't have to get whatever they offer. they will always be stingy. i'll go between. yes sometimes they don't fill me and i have to play their game, but not always.
I had to get a pro, Sir Eric Arlto to manage my trades as I have no skills for that, my portfolio has been growing up to 7 % daily depending on market conditions and this is the sixth month for me
Hi, what if I will like to give it a try with your pro, since you are familiar with his abilities maybe you can connect me as I haven’t made a good trade in weeks
After receiving your premium can you close your "sell put" position and get your collateral back? and then sell same put again same day? If not, I don't see the benefit of locking up so much capital for so little return.
Great video! Newbie question -- how much money do you have to have in your brokerage to carry out 4 transactions? $109,850 (total price of stocks if you get assigned for all stocks) or $43500 (the highest collateral ie for SQ stock)? Thank you.
4 times the price of buying the stock at the strike price in a cash account. In a margin accout, it will be much less but there is more risk in trading on margin.
Do you ever just buy and in the money weekly for max premium, then retain the collateral for the 2nd 100 shares and then just have covered calls and puts going weekly and simultaneously? Would this ultimately profit more annually?
Hi there! Your videos are great! I am wondering if selling 1 contract, do I need to have the funds for 100 shares in cash in my account at the time of selling the put contract? Or I can just make sure to have the money available just before expiration?
You need to have enough cash to cover your selling put. Unless you have a margin account that you don't need to have cash around, which is called "naked put"
When you sell a put, When do you collect premium? Do you have to let it expire or how can you collect premium and lock it in? Obviously if it falls below strike you will get premium and assigned.
As soon as you sell the option and your order fills, you collect the premium deposited in cash on your account. But you are on the hook to buy the shares if the stock trades below the strike price at expiration. If it trades above, the options expire worthless. In both cases, the premium is yours. In between you can exit that contract by buying back the option which could be for more or for less that the premium you collected.
Good video but i have to comment on two things: This is not passive income, bc you need to do something for it. Yes you can let your money compund interest, but this is for sure not passive. Seconde, while statistically in an ever rising stockmarket selling puts is less risky than calls, this still has some huge risks to it, which you do not mention. This works well when the stock is trading sideways or up, but if it drops of a cliff you can loose a shitton of money. That is why you always should use the wheel stretegy when selling puts, bc than you can soften the blow from a falling sharprice.
This explanation never implies not doing the wheel. A falling knife is even more dangerous than holding shares. Another strategy is being by able to roll out your options to a further expiration when in danger of exercise. And you often get paid well to roll out options
The wheel strategy may not work in the case of a big drop. A stock that is assigned at $100, and now trades at $10 won't have many buyers interested in calls at $110
Even the wheel still has major exposure to large drops in the stock price. BABA is at $86 now...you can wheel that stock all you want, but chances are you have not been making a net profit for a long time.
No. Ideally you want those stocks to stay where they are or go up in value (stay above your selected strike price )so you will collect the premium and not be forced to buy the shares.
what worries me is you are not hedged for a outlier event that might push the stock down considerably past your assignment value. Like what happens if you sell tsla puts at 875..then significant event crashes stock to 800 ...and you get stock at 875...all your gains from all this activity could be wiped out. Why not do vertical spread and buy out of the money puts as hedge?
This is exactly why I short the stock if it drops below my put strike...totally covers my obligations on the contract if I get assigned AND I would still walk away with the premium. Selling vertical spreads is also a great defense tactic in itself. You just have to make sure you do something in situations like you just described.
After a terrible 2022, shell-shocked financial backers have a lot to think about and losses to recover from. An expansion report and a wealth of other data did little to alter assumptions that the Central bank would likely keep raising interest rates regardless of whether the economy slows down. This implies that portfolios will experience more losses during the first quarter of 2023. I'm currently at a crossroads deciding whether to exchange my $250k security/stock portfolio; how might the continuous market volatility work to my advantage?
Concentrate on two main objectives. First and foremost, keep yourself safe by knowing when to sell stocks to reduce losses and maximize gains. Second, prepare yourself to gain from a market turnaround. I advise you to seek the advice of a representative or financial counselor
@@harrisonjamie794 In fact, ever since Coronavirus, I've been in regular communication with financial examiners. Nowadays, buying moving stocks is quite easy; the trick is knowing when to buy and when to sell. The section and leave orders for my portfolio are made by my counsel. accumulated more than $550,000 from a $150,000 savings that was initially stale.
@@DavidAntony-gq7id Please provide the information for your investment advisor here. I really need it now.
@@harrisonjamie794 She is KRISTIN GAIL CUNNINGHAM , my consultant. Since then, she has devoted section and leave attention to safeguards that I have been keeping an eye out for. You can locate information about the chief online, on the off chance that you're interested. I made no regrets about substantially adhering to their exchange strategy.
@@DavidAntony-gq7id sincerely thank you I looked her up on the internet and was awestruck by how qualified she was; I contacted her since I need all the help I can get with canning. I've just scheduled a call.
out of everyone in youtube , your one of the most legit people i know that trades options and actually shows his portfolio thank you for motivating me 🙏
I just started doing this but only doing 90% trades. I can't believe I just learned how to do this! Easy $100-200/week.
This was incredibly helpful as I'm just diving into options and have a couple options trades under my belt. Subscribed and thank you!
I realize that I'm late to the party, but this video is about to change my life. I can't wait to put your strategies to work starting right now! Thanks for producing such great content.
Tell us your experience with this strategy, does it work?
@@787beb0 Yes it does! I was already experienced in trading stocks, and now adding this PUT strategy, along with selling covered calls I expect to add an additional 10-20% to my yearly returns.
I'm brand new to options trading and trying to learn what I need to before I start risking money. Your channel is one of the best as far as pertinent, detailed information.
Thank you sir you are a blessing! Most try and make it sound difficult but some reason i understand you perfectly!
Thinking of selling the June 18th $200 put for SQ. $900 premium! $190 put looking good too.
These are my favorite videos of yours. Keep em coming, and do an options portfolio reveal video please!! Thanks for sharing all of your knowledge
More to come! Thanks! :)
CRUDE OIL PRICE WILL RISE AGAIN BECAUSE OF YEMEN INCIDENT OIL PRODUCTION IS LOW NOW IT WILL RISE AGAIN TO 100$./B.
@@dragon.fromindia3235ok bro😅
How did you end up closing these options? Do you have a follow up video?
That’s what I want to know lol. Definitely not collecting just by clicking
Bruh this guy is actually helping me understand it more, I like the detail he goes in to, with this stuff for me atleast it requires a lot of specific detail for me to understand it
Well this video didn’t age too well. However it’s an extremely helpful video in understanding selling put options. Selling puts does make one a better investor. It forces one to be patient and instead of just setting a limit order your also collecting the premiums
Ya my guess is a lot of those "quick and easy" profits from last year will be disappearing for a lot of put sellers this year :)
well from what I can tell he did make money on PTON; it went up again, to $120+.. before now (05/2022) crashing down to $14! lol
120 days ago things felt alright, not so much now September 2022. What will January 2023 look like?
I lost everything twice
hi about setting STOP LOSS on options? and is it alright to to BUY BACK sold option EVERY NEXT DAY in order to keep contract expiry for ONE day ?
I made 19k last week using one of your strategies! Unfortunately, it was in my paper trading account!😔….will continue practicing!😉
Thanks for sharing 👏🏽👏🏽👏🏽
What is paper trading i searched it up and is it like practice trading?
@@jacobgonzalez3789 - uh yeah. What else would he be saying?
Nice presentation Henry. I took the Tesla put 500 and 475 @ 2 weeks out. Basically at the daily 250 MA and just below at major support. I hope I get assigned so I can sell some covered calls while holding for a summer swing trade.
Nice work!
Awesome plan. I also want to sell puts on Tesla but waiting to transfer more cash to cover it.
Hello just need help if the stock hits below ur strike price sellin put call,does robinhood automatically buys the 100shares of stock since they held the collateral or they send u msg sayin u r assigned? My option expires on aug 20, hasnt received any msg frm . Shud I wait until Aug 20th which is tomm?
@@basantashrestha6245 u need to keep watching the stock price, if it will be near or lower than your strike price then either buy back or roll before the market close (I suggest at least 2-3 hours before to avoid any issue). Robinhood is not going to call you. They will assign 100% if stock price is equal or less than strike price.
Good day if you sell a put you expect the price to go up or down for you ?
You want the price of the put option to decrease. This will happen the most quickly if the stock price increases, but it will also happen if the stock simply remains above the strike price as you approach expiration.
Probably the best PUT video I've seen so far. Great job!
Just curious.. regarding the Alibaba stock.. on May 14th it went down to 209. Did you have to purcahse the stock?
Looking forward to today, BABA is $78, SQ is $59, and PTON is $5. Your stock analysis is no better than reading tea leaves.
Yes. Do this. Especially toward early March. 🍿😉
Lol ya all these "passive income" put sellers are going to get crushed this year...or perhaps already have been crushed lol
@@scottreesetradinginvesting7936 yes. As expected 🤣🤣🤣 I had forgotten about this post. Glad I saw this.
Good video. I liked the real time demonstrations. I would recommend bringing down your exposure quite a bit, and maybe bringing down highlights and some other tweaks in video editing to make your video look more professional.
Thanks! I need help with editing. Reach out on instagram if you are good at it.
@@InvestwithHenry Wow unbelievable....I could care less about exposure and professionalism, the content is all that matters. I wouldn't worry about it Henry.
You are a pro teacher bro..... PATRIOT!!!!👍😎👍
I would like to see how you manage these options trade. When do you close them out, and how to minimize the loss if the trade is going against the plan
Really cool strategy, I have 215 shares in Tesla which I wanted to keep forever, what conservative strategy would you consider? Just wanted 1% per month so about $2000 per month. Any ideas?
Selling covered calls would probably be your best bet. And if you're worried about getting assigned and losing your shares in some cases, you can just continually roll those calls to the next expiration cycle to avoid that...and also collect more premium!
Covered calls and roll as needed
Henry, thanks for your explanation of your Put option passive income strategy. I have some questions for you. Just so I understand, you are OK with your $175k investment only earning between 1% - 1.6% return per month on options premiums? I ask because even though the weekly premiums are lower, they add up to be worth more per month than the monthlies. My next question is this: Earning less than $2000 per month on whopping $175k capital, what are you planning on doing with your less than $24k per year in options premiums? I am curious because these premiums are being earned at a relatively slow pace. Do you use the premium money just to pay rent and things like that? Or are you slowly feeding the option premium money back into your investment pool to continue selling more monthly PUTs? Thanks.
Wasnt the 1% per week ?
Take that as 1 example, that 1% in premium is for a particular stock, particular strike, particular timeframe. All those variable will affect the amount of premium and this also comes with the probability of making that profit. You could diversify in some trades that targets 5% per week and some just 1% per month. Risk reward ratio.
Hi. Would be able to recommend a platform to trade options in UK?
Love your content. I’m familiar with how options work. My problem is knowing which stocks to pick. Can you do a video on how to select stocks for options? Thanks.
This is simple just look in your portfolio only sell options on stocks you really want to own for the long term this way if it gets exercises you get shares you already own at a discount if it does not you keep the premium free and clear
Do you do any trading off of indexes or leveraged indexes?
Great video. Only suggestion is in post move yourself from the portion of the chart you are talking about. At 18:23 you are talking about lines that your PIP is covering.
Hey Henry, I love your videos. Great stuff and thank you for the great work. Can I ask where can I join your community? I’m a wheels strategy trader too 😊
If I have a 330/325 FB Bull Put Spread, on expiration, FB stock price is 328.
Will the broker
1) Assign the short leg and allow the long leg to expire? (And this will require capital)
2) Assign the short leg and exercise the long leg, therefore cancelling out each others and resulting in some loss ?
Did #1 happen for you?
You will get assigned on the 330-strike short put. The 325 long put will expire worthless because it remained out of the money. So to avoid this rare but potentially dangerous situation, simply close your spreads before expiration!
You have decent experience and nice capital. I would recommend vertical spreads for newbies.
Where do y'all option trade at? Is it good to option trade in webull?
Thank you so much for your videos Henry😊
Watching this after a year where all these stock have dropped between 50-80 % in value. can you make a video on the consequences of doing wheel strategy with these stocks and what happens when the price goes down? Thanks
⬆️⬆️⬆️thanks for the comment..
Contact the What'sap line above for more information, advise and consultation.
i am a bit confused, you need the collateral(price of stockx100) to get the premium of x amount, does the collateral coke back or will you be losing that to gain the premium?
The collateral will be released once the trade is over IF the put option expires worthless. Otherwise, you'll be assigned 100 shares of stock, and the collateral will be used to make that purchase.
Pinned this video down, helped me when I started some months back but I lost money because I was gambling the market by myself but then it is the most lucrative investment I have now
Mr (Eric Arlo) a fiduciary is the man behind my success that's why I succeed at it, it's that plain maybe he could help you
Arloeric 1(a)Gmai
Lcom...Is he taking commissions for trades? Yes, he is
I rather pay a commission for expertise and profits than to loose money hopelessly gambling
Do you have a weekly list to buy and sell options?
Hey Henry, I am still trying to understand the whole thing. What should I do when a share is trading at its 52 weeks lowest price and I know that it it will go up in price in few months/years. Should I sell call or sell puts?
In this case you would sell puts. If you buy calls and the price drops, you lose money. If you sell puts at the money and the price falls, the contract expires worthless for the buyer and you, as the seller, keep the premium.
that video contains some incredible helpful tipps! thank you !!! perfect to see your csp procedure! 👍🍀🙏
Do you select what delta to trade?
For short puts, I have found selling around the 30 delta has a good balance of risk to reward. About a 70% chance of profit and you still collect pretty decent premium.
I’m watching this one year later, it’s now September 1st 2022 to be exact and Peloton is now at $10.25
And Square is $62 😮
I like your approach. As for me I prefer selling cash-secured puts with 30-60 DTE. To find these stocks I use options scanner by 5Greeks
what if the price moves against you? I was under the impression naked puts and calls are risky. would it not be less risky to use a credit spread strategy?
@Henry ㊉①②①⑨④②④②⑧⑨⑦ Thank you for the offer but this type of options trading is to risky for me. I am learning all about options trading but it was clear that naked trading that your did in your video is very risky. I would like to offer constructive feedback on your video. Maybe you should make it clear to people that naked trades like you are doing is high risk when in fact there are safer ways to trade options with probability trades of 75-80%, which uses less of your account capital and limited risk!.
super cristal clear for a difficult subject thank you
What happens if you don't have enough for collateral? How can some one use options to build their portfolio?
You do need some capital for this strategy
Hey Henry when are you going to write a book about options. I never done it before and I feels a little nervous to that. I only have about one year trading buying low price and sell at high price. Is a little confused for me.
Soon!
Hi, what will happen if I sell put at a higher strike price than the stock value? For example if a stock is at $100, and I sell put at $120.
Henry, selling PUS is great, but, you need to cover the pUTS in case of assignment. You premiums look great when because you have the funds
Bingo
My first video with him. All he did was place the orders. I liked his tech analysis but the true test of him keeping any of the money has yet to be shown.
Looks like you may be owning some square! lol. It dropped a lot today, but overall the chart shows Square consistently rising over time! Price will probably jump up a few dollars tomorrow.
We shall see
That's why the best strategy is to always go out at least one month. Gives enough time to allow the stock price to change.
If the stock goes up do you lose anything or just keep the premium?
If the stock is above your put strike by expiration, you keep the full premium. You can also buy back the put before expiration if the price of the contract falls substantially. You will make the difference in your sell and buy prices as a profit as well.
@@scottreesetradinginvesting7936 is there any point in selling an out of the money put above the stock price?
@@CursedWarrior100 I think you meant to say in the money? All puts with strikes above the current stock price are in the money. And no, I don't see any reason to sell these. You'll collect a much larger credit obviously, but if you get assigned, you'll just end up giving most of it back.
@@scottreesetradinginvesting7936 my only thing is... my stock is 1.10. I sold a $5 put (to see what would happen). It list current prince as $4.95 while the stock is down at $1.06. So would it get assigned when that option price hits $5 or the actual stock? Robinhood sucks when it comes to clarity lol
@@CursedWarrior100 You run the risk of early assignment if there is no more extrinsic value remaining in the contract. With the stock at $1.06, that $5-strike put option has $3.94 of intrinsic value and $1.01 of extrinsic value....just going off the $4.95 price that you mentioned. So right now, there is hardly any risk of early assignment. I also have a video that takes a deep dive into early assignment risk as well in case you're interested...
ruclips.net/video/CX9B-qPJmMM/видео.html
Thanks for this great video. I need a good video like this instead just talking about it. I need to see exactly how you place and sell etc.
I did that watch the whole video
Henry!! new to your world.....wow....you are da man. Great job.
Finally it clicked appreciate it thanks!
Amazing video, can we do the same but instead of selling puts, selling credit spreads for those who have less capital? Thank you keep up the great work.
Yup! Selling put credit spreads is the more capital efficient form of selling puts.
The risk to reward ratio is terrible for selling options/spreads, which is why I switched to buying/debit spreads
You have to factor in the probability of profit though. Yes you may be risking $100 to make only $25, for example, but you might have an 80% chance of making that $25.
What happens if you sell a put option with a strike price above the stock's price? I see ppl get strike prices under stock's price which makes sense, but im just curious when the strike price is already above. Do u get assigned right away at the stock's price or strike price? Or nothing happens
You will not get assigned right away. However, as long as the option is in the money, there is a greater risk of getting assigned early. But this would only occur if there is no extrinsic value remaining in the contract. I have a video that takes a deep dive into this topic if you're interested...
ruclips.net/video/CX9B-qPJmMM/видео.html
How do you save yourself from stock suddenly plummet, do you buy cheaper puts to as insurance ?
That's one way you can defend a trade. You can also buy back the put option at any point to cut losses. Or you can try shorting shares of stock, which is what I do.
Hi great video however i would like to ask. Assuming you sell puts and the stock price reaches your strike and you have to buy the stocks isnt it possible to just sell your stocks back and keep your money having a slight loss compared to the premium you would’ve gotten assuming the trade went in your favour
Yeah it depends
Or sell
Covered calls
CRUDE OIL PRICE WILL RISE AGAIN BECAUSE OF YEMEN INCIDENT OIL PRODUCTION IS LOW NOW IT WILL RISE AGAIN TO 100$./B.
good video Henry. thank you. are you still bullish on PLTR?
“I don’t think Alibaba can fall much more…” Glad I’m watching this in 2022.
Ya this is exactly why selling puts is a terrible idea to try and create a passive income stream for yourself. They're a great investment tool for the long-term, but making "quick and easy" profits all the time is a fantasy.
Great a thorough explanation of selling put options! Awesome work on a concept that can be very confusing for new investors.
if you sell a put option before the expiration how can you collect the profit. by selling?
Holy shit you are like the best options trading/ investing channel there is
Henry, thank you for the video! What would you recommend though for someone with only a $500 account to start? I do not have the capital to put up like you do unfortunately but I will get there eventually with enough learning and practice
⬆️⬆️⬆️thanks for the comment..
Contact the What'sap line above for more information, advise and consultation.
Where's the reply?
I"m new to all of this, but my first "test run" got me $7. So this really works. I don't have enough funds to do a whole bunch of these at once yet. But i hope to one day.
I am confused on something. I was just looking at GoPro. if its at $4 a share, and i write a put for $1, does another investor have to buy my put before I get the premium? Do i get nothing if it expires without a buyer?
If you are able to sell meaning you order filled and you have that $1 on your account, it means someone bought on the other side.
Hi Henry, I did (by mistake) a Put with Buy To Close of 14 options of AAPL with premium of $2.69 - a Strike of $170 and expire in 4 days (Feb. 4). I think, to close this position, I need to do a Sell To Close. My question is what should I look for Bid and Ask - should it be higher than $2.69 so I don't lose money? Thanks a lot in advance!
This with make me self sustainable for life. ✍🏾🙏🏾
Thanks for all your knowledge and insite your giving to the streets. I have a question regarding the collateral. Is that coming from your buying power because your collateral is so much higher then you profit. Thanks again for your prospective on this subject.
You only sum the potential premium earned at expiration but the total required buying power for all those cash secured puts is huge.
Requires a > 100K account.
⬆️⬆️⬆️thanks for the comment..
Contact the What'sap line above for more information, advise and consultation.
If the option expires on Friday and you try to sell is on Wed will it get sold
Henry, when looking at Peloton what did you mean by the "2 green lines" indicating that buyers were starting to come back in? Your camera feed is situated in the bottom righthand corner so it's covering the most recent price action and technical indicator values. I can't see what "green lines" you're speaking about. Are you talking about the two bottom Bollinger bands or something else?
Hi,
You have given the useful insight of put option strategy but I believe if you speak little slower, it helps to understand effectively.
I'm confused.. if I'm selling the *put why do I have to buy if thr strike price is reached? Doesn't the person that purchased the put have to buy?
A person who buys a PUT has the right to sell shares. one who buys a CALL has the right to buy shares
very nic explanations you really got it
Great video, easy to understand. However, why would you not put in the ask price when selling a Put to collect maximum premium. I would think you should have your limit price at "Ask price" when selling a put to Open and "Bid price" when you are closing out with a Buy. Can you clarify?
Because setting a limit order at the ask reduces the chance that your order will be filled.
@@kylesteiner4158 but you don't have to get whatever they offer. they will always be stingy. i'll go between. yes sometimes they don't fill me and i have to play their game, but not always.
Thank you for this great packed video. Thanks for answering the DTE question for weekly/swing trades.
Hope you sold those stocks before they tanked.....Thanks for the video...very helpful!
Thank you. I always wondered what selling options was all about.
⬆️⬆️⬆️thanks for the comment..
Contact the What'sap line above for more information, advise and consultation.
I had to get a pro, Sir Eric Arlto to manage my trades as I have no skills for that, my portfolio has been growing up to 7 % daily depending on market conditions and this is the sixth month for me
Hi, what if I will like to give it a try with your pro, since you are familiar with his abilities maybe you can connect me as I haven’t made a good trade in weeks
I plan on making short term gains as a passive source soon as I get started, how much is his commission charge please
I have done very well by trading Stock options as well as using simple covered calls and married puts over the years
How about uncle henry ?
Hi, please how do I connect with your trader
After receiving your premium can you close your "sell put" position and get your collateral back? and then sell same put again same day? If not, I don't see the benefit of locking up so much capital for so little return.
Does rolling over in the money put options count as washsale?
Great video! Newbie question -- how much money do you have to have in your brokerage to carry out 4 transactions? $109,850 (total price of stocks if you get assigned for all stocks) or $43500 (the highest collateral ie for SQ stock)? Thank you.
4 times the price of buying the stock at the strike price in a cash account. In a margin accout, it will be much less but there is more risk in trading on margin.
Hello! How much would I need to start? Thank you
5k
Do you ever just buy and in the money weekly for max premium, then retain the collateral for the 2nd 100 shares and then just have covered calls and puts going weekly and simultaneously? Would this ultimately profit more annually?
In the money weekly? Call put? Buy or sell?
Nice! Now you own BABA.
And now he's down even more money on BABA :)
Hello Henry. I just saw your video, and I saw you to enter the trades with one day expiration. That can you do it with one day expiration ?
⬆️⬆️⬆️thanks for the comment..
Contact the What'sap line above for more information, advise and consultation.
Hi there! Your videos are great! I am wondering if selling 1 contract, do I need to have the funds for 100 shares in cash in my account at the time of selling the put contract? Or I can just make sure to have the money available just before expiration?
You need to have enough cash to cover your selling put. Unless you have a margin account that you don't need to have cash around, which is called "naked put"
@@bongt5629 ok thanks for your help
Amazing practical tips. Selling puts is best.
What does losed mean @ 4:45?
Thanks for sharing your experiences with us I invested 1500 last we & made a $900 us profit
When you sell a put, When do you collect premium? Do you have to let it expire or how can you collect premium and lock it in? Obviously if it falls below strike you will get premium and assigned.
As soon as you sell the option and your order fills, you collect the premium deposited in cash on your account. But you are on the hook to buy the shares if the stock trades below the strike price at expiration. If it trades above, the options expire worthless. In both cases, the premium is yours. In between you can exit that contract by buying back the option which could be for more or for less that the premium you collected.
Good video but i have to comment on two things:
This is not passive income, bc you need to do something for it. Yes you can let your money compund interest, but this is for sure not passive.
Seconde, while statistically in an ever rising stockmarket selling puts is less risky than calls, this still has some huge risks to it, which you do not mention. This works well when the stock is trading sideways or up, but if it drops of a cliff you can loose a shitton of money. That is why you always should use the wheel stretegy when selling puts, bc than you can soften the blow from a falling sharprice.
This explanation never implies not doing the wheel. A falling knife is even more dangerous than holding shares. Another strategy is being by able to roll out your options to a further expiration when in danger of exercise. And you often get paid well to roll out options
The wheel strategy may not work in the case of a big drop. A stock that is assigned at $100, and now trades at $10 won't have many buyers interested in calls at $110
Even the wheel still has major exposure to large drops in the stock price. BABA is at $86 now...you can wheel that stock all you want, but chances are you have not been making a net profit for a long time.
@@scottreesetradinginvesting7936 Sure but it is still less risky than to only buy and hold stock.
@@TheHolzing Yes definitely a good point…but still be careful in this current market environment!
I like the peleton order. about 2.5%. Since you ordered it's up a few dollars.
Awesome!
When you’re selling these put options is that meaning you are hoping/betting the stock continues to decrease in trade price?
No. Ideally you want those stocks to stay where they are or go up in value (stay above your selected strike price
)so you will collect the premium and not be forced to buy the shares.
How much are you looking to collect per trade? 1% of stock price?
Great video, i did almost exactly like the way you taught on this video in the past few years
Thank you so much, again, it is awesome video
what worries me is you are not hedged for a outlier event that might push the stock down considerably past your assignment value. Like what happens if you sell tsla puts at 875..then significant event crashes stock to 800 ...and you get stock at 875...all your gains from all this activity could be wiped out. Why not do vertical spread and buy out of the money puts as hedge?
This is exactly why I short the stock if it drops below my put strike...totally covers my obligations on the contract if I get assigned AND I would still walk away with the premium. Selling vertical spreads is also a great defense tactic in itself. You just have to make sure you do something in situations like you just described.
Dope now I get put options even more I usually just buy a put out of the money and sell when I'm up
Good one, thank you Henry.