Generate income from options trading strategies
Watch this video as a re-cap. The concepts become clear after a few practices and it will be easy like ABC. There are many options strategies out there butterfly, iron condor, short straddle etc but OMP teaches only 3 strategies which are simple and proven to work.
Also, combining with some fundamental analysis, the strategies emphasize on protecting the downside too. Leveraging on this technique and other options strategies, you are collecting monthly premiums month after month. Today, I consistently make a monthly income from an investment capital which I allocate for options trading while I practise other stock investment strategies and manage an overall portfolio.
I have attended many courses before, some are simply crap, some are not worth the money you pay but the return from attending Options Mastery Program is like acquiring a very useful life skill.
Your email address will not be published. I am interested in investing through options covered calls and naked puts. Need more insight around that. Second, if you come across the term Binary Options, and something which promises high returns and auto-trades for you, please take flight and run away quickly.
If you are new to options, it is a type of derivative security and is intrinsically linked to the price of something else, like an options to purchase for properties. Here, we focus on options on stocks as traded on the stock markets. There are only 2 types of options, Call and Put options.
The right to buy stocks is called a call option and the right to sell stocks is a put option. A call option might be thought of as a deposit for a future purpose. In options terms, the deposit is called the options premium.
A put option, on the other hand, might be thought of as an insurance policy, An analogy will be like car insurance. The insurance company collects the insurance premium from you by selling you an insurance policy.
As the car owner, you pay the premium but you are protected against any damages to the car. The greater the volatility, the greater the time premium. The value of the underlying security on the open market, if the price moves above the strike price prior to expiration, the option will increase in lock-step. The main objective of selling aggressive covered call options is to generate income however one must be cognizant of the underlying security of interest.
This underlying security must provide certain characteristics in order to optimize premium income:. As the main objective rests in generating current income, relinquishing shares is a likely possibility as these are trades not necessarily investments.
Since the payoff of purchased call options increases as the stock price rises, buying call options is considered bullish as notated in the introduction.
In this case, the buyer believes the stock will increase in the near-term and buys the right to purchase the stock below where the buyer believes the stock price will be in the near term. When the price of the underlying stock surpasses the strike price, the option is said to be "in the money" and at this point, the buyer may exercise the option contract.
If this occurs, the option expires worthless and the option seller keeps the premium in the form of cash as profit. Since the payoff for sold call options increases as the stock price falls, selling call options is considered bearish as indicated in the introduction.
The seller believes the stock will trade sideways or move to the downside over the near term and thus is willing to leverage his shares while collecting premiums. A comprehensive overview is depicted in figure 1, illustrating the example discussed above Figure 1.
Figure 1 — Fictional sequence of events and overview of an aggressive covered call option and its possible outcomes in generating current income.