1/
It is quite profitable to sell put #options for income. It is fairly passive, and if done correctly, there is actually very low risk. Here is how I do it.
#NotInvestmentAdvice
$TSLA $MSFT $SE $CRWD $BABA $FB
It is quite profitable to sell put #options for income. It is fairly passive, and if done correctly, there is actually very low risk. Here is how I do it.
#NotInvestmentAdvice
$TSLA $MSFT $SE $CRWD $BABA $FB
2/
Rule #1: Only do this for the companies I want to own, at a price I am willing to pay, and without blowing up the position size if assigned.
So I continuously do this on highest conviction #stocks, eg: $TSLA, $MSFT, $SE, $CRWD
Or the stocks at great value: $BABA, $FB
Rule #1: Only do this for the companies I want to own, at a price I am willing to pay, and without blowing up the position size if assigned.
So I continuously do this on highest conviction #stocks, eg: $TSLA, $MSFT, $SE, $CRWD
Or the stocks at great value: $BABA, $FB
3/
Strike price: Informed by valuation. Try to sell ATM for maximum time value if price is great. Otherwise 10% OTM. Do nothing if the stock price is rising.
Expiration: On average 4 weeks out. Longer expiry during market correction, shorter when the stock is consolidating.
Strike price: Informed by valuation. Try to sell ATM for maximum time value if price is great. Otherwise 10% OTM. Do nothing if the stock price is rising.
Expiration: On average 4 weeks out. Longer expiry during market correction, shorter when the stock is consolidating.
4/
Frequency: Never sell puts on the same stock more than once in two weeks. Avoid “doubling down”.
Frequency: Never sell puts on the same stock more than once in two weeks. Avoid “doubling down”.
5/
The trade moves in my favor: Close the position if the gain is >80%. Use the freed up capital to sell some other puts.
The trade moves against me: I’m OK with taking assignment to begin with. But will typically try to roll out by 4 weeks on the expiration day.
The trade moves in my favor: Close the position if the gain is >80%. Use the freed up capital to sell some other puts.
The trade moves against me: I’m OK with taking assignment to begin with. But will typically try to roll out by 4 weeks on the expiration day.
6/
This is fairly passive. I rarely take assignment. And I comfortably earn 30%-50% annually (I made up a term and call this the “Premium Yield”.)
For $TSLA in particular, the premium from continuously selling puts alone has reduced my cost basis to below $0.
/END
This is fairly passive. I rarely take assignment. And I comfortably earn 30%-50% annually (I made up a term and call this the “Premium Yield”.)
For $TSLA in particular, the premium from continuously selling puts alone has reduced my cost basis to below $0.
/END
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