Sell options for a living
Another month down and another month making money selling options. I was very successful selling options inbut in the first half ofnot so much. In June ,I decided to spend a little more time investigating trades before pulling the trigger. This has made a difference. Easy things like validating if an earnings call or dividends would be paid within an option contract period. Neither action would necessarily stop me from trading, but accounting for them and their potential risk is important.
Last month I sold a bunch of stock. I was in the process of moving some of my money from 2 brokers over to Interactive Brokers. I sold because markets are really hot and most stocks are overvalued.
I wanted to lock in gains and use the money to sell more options. My retirement goal is to spend my golden years living on dividends alone. This means I need to have millions of dollars in stock. I see options as a great sell options for a living to boost my stock ownership and dividend income.
I DRIP invest most of my monthly dividends. I hold my options income until it reaches a few thousand dollars. Then I buy more stock or I use the cash as leverage to sell another option. The plan is to reach financial independence sooner.
Dividend stock investing, DRIP reinvestment, and selling options is a sell options for a living for my portfolio. At least I hope it will be. This month I spent time improving my options tracking spreadsheet.
I added many new columns, including contract length, stock price DOC day of contractcurrent stock price, break even price, and annualized rate of return. The red and green dollar amounts shown in the current stock price column, adjust color automatically to show if an option is in my favor or not. This spreadsheet is a work in progress. This new version is better than my last one.
If you sell options for a living there are metrics I should add or if you see any mistakes on this tracker, please let me know. Many of the stocks in my portfolio are already in options contracts. I did sell a 3-day Target put, 2 days before earnings. I choose instead to close and carry. But I have 5 months to close this new contract or carry over to a better positioned contract. I only sell covered options. This means I either need to own each underlying sell options for a living or have cash sell options for a living to cover each options contract.
Had I held sell options for a living of my stocks, my options income this month would have been zero dollars. Most of this money is in Roth and traditional IRAs, which means these transactions are tax-free or tax deferred.
I could miss out on further stock appreciation and some dividends next quarter. But, I still believe markets are heading down in coming months. Because of this, I feel really good about holding cash back and making extra money selling options.
Pinterest users are savvy and enjoy visuals. Ciao IH, We are having a similar run of experiences, though I see that you are much further into option trading! First of all compliments for the results, one point that I always try to remember is that the gains are not locked until options are closed.
I am also trading long shot options and that means that I need to set aside the cash until expiation. In any case very good work there! How do you choose the target strike on your option trading? Yes, showing monthly income is a snapshot in time. This of course never happens. To find my strike price, I first find the stock with enough price movement to make options interesting or worth it to me.
Then I choose a few strike prices, in or near the money. Then I run those strikes through my spreadsheet to determine annual ROR. Then I look at a few different time periods. Maybe the ROR is better on a longer contract. I end up choosing the time period and strike price with the best ROR. Then I go for it.
I only sell puts and calls. Sell options for a living find Interactive Brokers very convoluted and confusing to use. I review and plan my trades on ToS and then make my trades on optionshouse. Much easier to use. The UI is very clunky, built for day traders I guess.
I do love the fees though. My plan is to keep sell options for a living Schwab account for research and monitoring, then do my trades on Interactive Brokers. But did you guys ever hear of dough? Yes, they do not capitalize anything.
Thanks for sharing Scott. It only works with TD. If you buy stocks you pay the standard TD commission. It is a really cool deal. How about adding the Dividend Ex Date and Earnings Date to your spreadsheet if it falls within the option period? I agree that these are both important to track. I agree Pinterest is tough. I think I need to create boards for all of the big topics, recipes, clothing, travel, etc.
Then start sharing a bunch of those pins. Then people will reciprocate. Congrats on the options income! I do have one question about the taxes — are you taxed on the total income e. I bet you love this answer. If the option expires worthlessly, record the premium you received as profit.
If the buyer exercises a call option against you, you must sell stock to the buyer at the strike price. Add the call premium to your sale proceeds — your profit or loss depends on the price you paid for the shares you sell to the buyer. If a buyer exercises a put option against you, subtract the premium you received from the cost basis of the stock you are obligated to purchase. Your profit or loss sell options for a living depend on the price at which you eventually sell the shares put to you.
If you offset your option — closing your short option position by buying an identical option — subtract the premium you paid for buying the offsetting option from the premium you received from writing the original option — the result is your net profit or loss.
This is why I have an accountant as one of my sell options for a living friends. Great job on the options. I have sold quite a few covered calls too. Selling puts on a stock you want to buy anyway is a great way to get a discount too. Thanks for the comment NNL. I sell both calls and puts. I seem to have better luck timing the market with puts though. I looked back at and found that I was more successful with short puts than long ones. I sold closer to the money at higher premiums and my success rate was pretty high.
To your point, I run the risk of buying more stock, but I can always flip it or sell calls if my put contracts get assigned. The short nature of these trades reduces my odds of big drops or downward trends, but these are always possible.
I like your strategy. Best of luck to you Evan. Many bloggers I follow are in different situations. Most of those bloggers are too conservative to test the options waters though. Oh darn, SF has really become a high sell options for a living of living area. Good luck getting your income up to the required levels.
That will be quite the challenge looking at the numbers…. The wife wants Thailand though. For now, happy to cheer you on from the sidelines.
When traders are first starting out, one of the most common questions they want to know is if selling options for a living is possible. The short answer is yes, but it completely depends on your portfolio size and cost of trading. This is something we cannot stress enough. You always need to keep your transaction costs, i. Commissions for active traders add up at the end of the year. Ally Invest is one of the most popular online brokerages for options sellers because they have deeply discounted commissions for active traders and offer access to enhanced trading technology and options analysis tools.
This is the biggest concept to understand when trying to trade for a living, especially if you want to sell options. As a trader, if you have sell options for a living capital to begin with, it will enable you to take on less overall risk and generate better returns. Maybe the next 30 trading weeks of SPX will see 25 consecutive weekly gains and selling put credit spreads would be the way to go.
The anonymous Japanese daytrader, CIS, is one such example. Knowing that there are two certainties in the market, it makes seling options an attractive choice.
Now, all of a sudden, selling options for a living just became a whole lot more realistic. When you have more buying power, you can generate better returns and take less risk. The power that retail traders have is a smaller scale and liquidity. Let that sink in. This is the key to trading. More capital up to a certain point before reaching the billions equates to better sell options for a living of returns for the retail sell options for a living.
Know all of the options trading strategies sell options for a living, keep your risk under control, and diversify your underlying positions. The other important thing to note is that you need to keep your fees as low as possible. Do not overpay for commissions, because every dollar you spend to place a trade is a dollar taken out of your account. There is a reason why serious options traders choose Ally Invest to trade options.
Ally acquired MB Trading and TradeKing and combined the best features of their respective options trading platforms into one central platform at Ally. Selling put options for income is an interesting way to generate returns in any portfolio for investors who understand the Ever since the rebound from the financial crisis inselling out-of-the-money put options has become a popular strategy among Selling call options has always been a popular options trading strategy among qualified traders due to the lack of downside When I first started freelancing, I never thought it would yield any decent monetary results.
I wanted to make a Selling Options for a Living — Is it Possible? Options Bro March 23, Selling Put Options for Income — Why it Works Selling put options for income is an interesting way to generate returns in any portfolio for investors who understand the Sell options for a living Put Options — What You Need to Know Ever since the rebound from the financial crisis inselling out-of-the-money put options has become a popular strategy among Selling Call Options — What You Need to Know Selling call options has always been a popular options trading strategy among qualified traders due to the lack of downside
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