Selling Put Options for Beginners FULL FREE COURSE (2 Hours)

Welcome to the only guide you'll ever need to successfully sell put options for consistent passive income this will be a step-by-step guide for absolute beginners on scaling up and learning everything needed about selling put options so you can be successful have low risk open close and manage each and every single put option that you sell for it to be profitable this full guide is for two types of people beginners to Options or option Traders with experience who just want to get a little bit better at selling puts and knowing Delta knowing the strike prices knowing

the expirations to pick how to manage the position from the very beginning of Entry all the way to closing for a profit if you're not making a full-time income from option trading yet the answer is very simple I'm going to show you how to do so I have many students who just focus on selling puts in General and that's why I'm making this two-hour course because I think you don't need to have many strategies if you understand how to sell puts properly you can make a ton of money I have students who are making $5

to $8,000 per mon month with their strategy and they're in retirement they don't have to worry about volatility they don't have to worry about stock making they're using the strategy on some simple stocks and they're doing it every single month For consistent monthly cash flow so first if you're not familiar with what an option is buying and selling calls or puts and how options work watch my options for beginners full course it's a 4-Hour course I'll pop it up on the corner of the screen right now and it goes over multiple different strategies and everything

a beginner needs to know about option trading this course will FOC focus more so on selling put options for beginners here on the screen now is Everything that I'm going to be covering in this course there will also be timestamps in the description because I respect your time so if you want to go through the play bar and see what works for you and what you want to skip that's your business that's completely up to you my goal here is to give you all of the education and everything that I know and what I've learned

working on Wall Street working at Goldman Sachs getting a finance degree and just transferring My knowledge and experience to you so you can be profitable and hopefully in return you share some of your wins with me and subscribe to the channel that'd be awesome first let's start with the basics before we dive into selling puts it's crucial to understand what put options are a put option is a contract that gives the buyer the right but not the obligation to sell a specific stock at a predetermined price called the strike price on or before a certain

Expiration date when you sell a put option you're on the other side of that transaction you're agreeing to potentially buy the stock if the buyer exercises their option to sell it to you at the strike price for example let's say a stock is currently trading at $50 and you sell a put option with a strike price of 45 the buyer of that option has the right to sell you 100 shares of the stock at $45 no matter where the stock price goes before the options expiration Date if the stock price Falls below 45 say to

40 the buyer might choose to exercise the option and you would be required to buy 100 shares at 45 no matter what even though the stock is trading for Less that's the risk that you take I'll cover later to this course how to make the risk essentially zero how to make it almost a risk-free trade where you profit and you're happy every single time that you open a put position because selling put options is safer Than stock trading and it's actually High income I'm going to show you a report of making 3.4% per month on

average now let me explain to you how this works by the way this is an article that I have used back when I was at Goldman and this article basically States I'm going to go over this most important part so selling puts is a higher yield and less riskier way than buying stocks so this is coming from Goldman Sachs not Myself so over the past 10 years selling listed one month at the money puts in S&P 500 stocks allowed investors to collect 3.4% per month in premiums and showed a 7.1% annualized return with a 12%

stand deviation let me explain to you what all of this means and how I've been able to actually beat this return by a lot so so basically if you had invested in the S&P 500 you would have made 7.3% with an 18% standard deviation however selling puts at 1 month actually Had a 12% standard deviation so it was a lot lower risk in fact it was roughly 33% lower risk than holding stocks so selling puts is safer however the returns are not that appetizing but I found a way around that and how to make a

lot more money put selling offers the same return as equities with lower draw down risk that means that during 2008 when the market went down over 30% put selling actually only went down 20% however you can see in this chart Something that is actually unusual which is put selling under the S&P 500 raw return that means the S&P 500 usually performs better but selling puts is safer the way I've gone around this is by just not selling puts on S&P 500 the reason why this is not a good strategy on S&P 500 is because that's

S&P 500 has very very low volatility you'll see how later when I do single stock put selling I'll be making way more than 7% per year which is pretty ridiculous that's like Nothing right I'm making around four or even 5% per month by selling puts but here's a Twist if the stock goes lower and you have to get assigned as the seller of the put option you actually get paid a premium UPF front for taking that obligation that premium is yours to keep regardless of what happens whether or not the buyer decid decides to sell

the stock to you you've already collected the premium upfront and it's cash in your account so even if the Stock Falls below the strike price that premium provides a buffer to reduce your overall risk it reduces your overall average cost and if the stock stays above 45 and the option expires without being exercised well you still get to keep the premium and now you get to do it all over again you get to sell puts as often as you like as much Capital as you have because when you do sell a put you should be

cash secured you should have the cash available to buy 100 Shares if it goes to the strike price we'll talk about managing that position from A to Z in just a moment so why would anyone want to sell put options the key reason is the premium income selling put options is one of the few strategies in the stock market that allows you to generate income consistently without having to wait for the stock price to go up the premium income is immediate you receive it at the moment that you sell the option Contract this means you

can collect cash flow regularly almost like getting a paycheck from the market and whether you want to get a paycheck on a weekly basis on a bi-weekly basis on a monthly basis even I have some students that want to just get paid quarterly they just want to sit back collect a quarterly income and basically live their life in retirement I think that's beautiful you get to choose that you get to pick the expiration and I'll talk about best Expiration selection later on in this course but it's not just about cash flow when you sell a

put option you're essentially getting paid to agree to buy a stock at a price that you'd be happy with okay that's what it all comes down to if you're long-term investor who believes in the company's fundamentals this can be an excellent way to acquire shares at a discount check out this example right here so selling put options is absolutely genius and let me Show you an example of how to do that so first of all as I'm making this course it is taking me a long time to do it and you can see here how

my portfolio is almost at $4 million I've been trading super successfully I'm super proud of myself in the community for getting really good results now let me just show you what selling a put option looks like I have so many sellp put options okay and I have multiple different expiration days so what I like to do is I like to Go for a highquality company so let's say that I want to sell a put option on Nvidia so if I go to Nvidia I'm going to show you what selling a put option looks like I've

actually been selling put options on Nvidia for a long time if you see different prices it is taking me multiple weeks to make this course so excuse me for the changes in the price all right so I have a sellp put at 130 a 129 cellp put and a 132 cellp put all of these options right here are making Money actually $1,810 at this very moment so these put options right here are an example of me trying to get assigned the stock and actually being excited to own the stock but getting paid in the meantime

to wait for a good entry price so I'm deciding that I want an entry price of around 130 or 129 or 132 so I am selling puts at this strike prices because I would like to get assigned and have Nvidia so let me show you an example of how I would do That from scratch so I will go to trade Nvidia options then I will go to sell put option so you want to sell a put option and the expiration that you want to usually choose as we've been talking about in the course can be

anywhere from 30 days or 60 days or 90 days you do get paid in direct proportion to how much time is left on the option so you know let's go for example December 20th okay this is about 40 days or you know 30 days as I'm making this video so let's Go to 148 let's go to sell put okay and then if I were to scroll down I'm going to be looking for for a Delta of around 30 which is roughly my sweet spot right if I go to 138 perfect so I have a 30

Delta here the volume is 649 and the open interest is 10,339 that is a very good open interest and the volume here is also very good now the bid ask spread is 515 and uh 530 that is pretty good because the difference here is $15 now the tighter It is the better because then you get a better fill rate you lose less money imagine if this was $5 and this was $10 that would be pretty bad because if you were to be selling this option you'd be losing a lot of money and if you'd be

buying this option you would also be losing a lot of money because of the non-liquid options these are very liquid so this is perfect and I would go for a 138 sell put and collect $515 right here you can see how I would Basically be making money as long as Nvidia would stay above $132 85 now how come I only start losing money at this point since this option strikes is 138 well the way this actually works is you actually will be assigned at 138 if Nvidia goes to 138 at expiration now before expiration you

don't have to worry about assignment I'll cover that in a little bit but as long as it's above 138 you're good even if it's at 139 or 140 or one you know 138 and two cents it's okay as long as it's above you're good now if it's below and there's still time to expiration you're also still good you just want to make a judgment call do you want to close this position do you want to roll this position right and we'll get into that shortly so 138 is a the strike price okay but the reason

why your break even is 13285 is because here you're collecting $515 or $5.15 per share and that's why you need to put that into account so you take the 138 and subtract the premium that you collect which gets you a break even price of 13285 as you just saw in the example it is genius to sell a put option because regard regardless of what the stock is trading at just like you saw it's going to look the same for basically every trade it's always going to be a lower average cost than the current stock Price

so let's use another broad example let's say you have a stock at 100 you sell a $100 put well you're always going to get paid for risk right so whatever that amount is let's say it's a dollar now your average cost is 99 right because you get paid a dollar when you sell a put so you're always getting a better price than someone that wants to just buy the stock right now someone buys it for $100 you're basically buying it for $99 because you're getting paid $1 so it's always advantageous to sell put options it's

more advantagous than just buying the stock unless of course the stock explodes in value because a sellp put option is going to give you pretty much a steady income but it may not give you a huge income it might not get to 20% per month 30% per month no but it can provide you a very safe passive income for retirement where you can generate the income that you need for retirement whether that's $5,000 or $10,000 or whatever your goal income is per month you can achieve it by selling put options and you can just use

this one strategy and Achieve retirement that's right the worst case scenario is you know when you sell a put option you get assigned stock that you like because you should always be basically selling puts on stocks that you like I think it's crazy if you sell puts um chasing volatility and chasing premium that's a really big mistake I see that all the Time I see a lot of my students well to be frank before they're my students they're chasing premium once I show them the math that when you make two three% per month and you

compound that and you look at your yearly return say it's 30 40% per year you start to realize that these numbers really add up you can really make a sustainable living by just selling put options so I want you to understand that it's all about safety and consistency for me at least I'm Being a little bit biased and this is a beginner's course but I still want to teach you the framework and my mindset because I think mindset makes a really big difference in trading so I want you to understand risk management I want you

to really understand that what the worst case scenario is and how you can avoid the worst case scenario because I'm a safe investor so you're going to um when when you're selling put options you're going to be getting a stock that you Like at a discount essentially you can think of selling puts as a safer version of buying regular stock it's Superior in every way except when the stock shoots up you you won't be able to profit nearly as much as a regular stock holder but when the stock goes down or goes sideways you're going

to be smiling a lot and you're going to be laughing all the way to the bank in literally 11 out of 12 months that's pretty much my results I win almost all the time some Months can be bad but they're always better than the stockholder so even in the bad months I'm outperforming because when you sell a put option it's out of the money usually we'll talk about outs of the money and in the money options but for now think about out of the money as a safe Zone if a stock is at 100 and

your strike is at 95 it's above your strike you're in the safe Zone well technically it's all the safe Zone because you're happy to buy it but an Out-of-the money option is simply when the strike is not currently in risk of being a signed okay so if you have a 95 sell put the Stock's at 100 you're above 95 if the Stock's at 98 you're still above 95 if it's at 94 well there's some chance of getting assigned you might get put some shares right the person who bought the put option they may decide to

give the shares to you that usually doesn't happen early I'll explain why later in this video but it usually does Not happen wor so you don't have to worry about early assignment it rarely ever happens actually let's talk about assignment real quick okay when you sell a put option there's a few different scenarios that can happen Okay first scenario is when you sell a put option as long as it's out of the money say you sell a 78 put the Stock's at 200 giving you a crazy example you got nothing to worry about it's going

to expire out of the money the Stock's at 150 you got Nothing to worry about it's very far you got you know no chance of getting a signed right so that's the first scenario you're well in the green everything is calm and relaxed now the second scenario is that stock is very close to your strike price so say you have a 78 strike price and the stock is at 78 7801 7803 something very very close you guys start thinking about do you want to get a sign do you want to close the position pretty much

I don't Even worry about it because again I'm selling puts on stocks that I like so doesn't even matter if the stock price is below your strike price you're going to be assigned and that chance increases the closer you get to expiration so there's three four weeks out you really got nothing to worry about here's why now I want to show you how it would make no sense at all for early assignment to happen so this is the same Nvidia option we're going to look at a sellp put Example okay and I'm going to pick

the 150 sellp put here okay so check it out let's say that you've sold a 150 put all right however now your option is in the money all right it's in the money so Nvidia is below 150 you might be thinking to yourself oh I'm worried I'm worried that I'm going to get assigned but the chances of getting assigned before earnings before expiration is very low and let me explain to you how low it actually is so if if your stock Is below 150 in this example think about it from the shoes of the buyer

someone who bought the put option if you think about it they're 150 how much are they in the money well if they bought at 150 and the stocks at 148 74 they're up $125 correct because they're $125 in the money the stock is $125 below 150 so if they were to exercise they would basically save or make or have a value of about 125 but look at the option it's worth $10.55 so it would make absolutely no sense whatsoever for someone to want $125 when they can just trade the option for $10.55 cents this is

very clear and very obvious right it's a very big discrepancy but let me show you something even shorter term even when there's like a couple days left even this option right here it's super super close and the discrepancy is going to be very little however even when there's a few days left the chance of getting a Sign they still near zero in this example 149 were a little bit in the money the option is still $3.40 and this would only be in the money by 25 so this would still not make any sense at all

for someone to want to exercise early all right so we talked about why early assignment usually doesn't happen I want you to understand you will still make money even if you get assigned this strategy is not about being greedy because chasing huge price Movements is only going to backfire in the long run now I want you to understand even if the stock price never drops to the strike price you still pocket the premium for your efforts it's a win-win scenario when you execute correctly executing correctly is actually the easiest thing when you sell a put

option because as long as you're doing it on a high quality stock you're going to be in good shape let's talk talk about how to maximize your succcess With this strategy okay I'm going to tell you all the different things that you need to be aware of there are three critical decisions that you're going to need to make every time you sell a put option number one choose the strike price select the expiration date and understand the premium you're going to get paid let's break each one of those down the strike price is the price

at which you agree to buy the stock if the option is exercised ideally you want to Pick a strike price that's lower than the current market price of the stock the reason for this is simple if the stock drops you'll be willing to buy it at a discount again even if you sell a put option at the same exact price as the stock you're still technically getting a discount because you're collecting income but it's even better when you can find a sweet spot and sell a put option that's already out of the money and you

get paid so now the stock Falls 2% and you're completely unaffected you've collected 1% income for the week let's say stock falls down 2% and you're like I don't really care it's still out of the money it still has not reached my strike price so for example if a stock is trading at 50 and you sell a put option with a strike price of 45 and think about it you're getting a $5 buffer which is amazing that means if the stock Falls from 50 to 48 everyone has lost $2 you're still Unaffected let me finish

you the point on why the stock option might be showing you a loss even though it's still out of the money because a lot of people get confused if the option is out of the money how can the option itself be showing a loss well that's because the chances again of that option have increased and they've gotten higher for the option to get into the money and since the option has increased in Risk it's closer to the strike price the Value has gone up okay let me explain to you and this is what I do

in my coaching program I give analogies okay so imagine that you can invest in people pretend that somebody is going to be a doctor and a doctor makes $300,000 per year so if you were to be able to buy a person which you can't but let's just say you were able to bet on that person 's income you know they're going to make $300,000 say it's going to happen for 10 years now you know that right so you You'll bet you know $300,000 now if you were to have an option on this okay and that

person has good grades and they're continuing to be at in med school and becoming a doctor you'd be comfortable right nothing changes however now let's say something bad happened let's say that person got into an accident or they started smoking and drinking and skipping classes and getting bad grades you would probably rethink your option a little bit right that person he or she Is still in medical school they're still going to be a doctor most likely but the chances of becoming a doctor have gone down so your risk has gone up right because that person

has got in bad habits the same thing happens with an option when the option gets closer to the strike price it's becoming more risky doesn't mean that things are going to be bad it just means at this moment in time it is a loss for you to buy it back the good news is you don't have to You don't have to buy it back because when we sell a put option it's not a single person we're betting on right a person is very risky right a person even a good student might have an issue or

an accident or change of of behavior let's say but a company a solid company a high quality company an Apple or Google right these are strong businesses with Brands lots of employees a long track record big market caps Big Brand big cash flows strong profit margins if you pick Companies like this then you could be very sure for yourself that hey even if you get assigned that it's fine you're happy to get assigned you're like sure Apple was at 200 now I get to buy it at 170 I'm happy to buy it at 170 170

might not even happen if it happen you get to buy it that's the beauty of selling puts you have a lot of control and you put yourself in a win-win situation next I want to talk about expiration date every option has a Specific expiration date and this is the date by which the buyer has to decide whether to exercise the option or to let it expire the expiration date is important because it affects the premium that you receive shorter term options like one or two weeks out will offer lower premiums but you'll know that outcome

of the trade more quickly longer term options like 30 to 45 days out will offer higher premiums but your Capital will be tied up for a longer period of Time many experienced Traders prefer selling options with an expiration date of around 30 to 45 days some of my students like more weekly income so they go for 5 to 7 days this strikes a balance between collecting a decent premium and not having your money tied up for too long keep in mind there's a lot of flexibility with options so you can sell onee options two we

options and monthly options nothing stopping you because selling options in general from My research working at Goldman Sachs I found that selling options has been extremely profitable it doesn't really matter what expiration date you go in my opinion 1 to 12 weeks is perfectly fine options decay in value as they approach expiration so a onewe option has more uh Decay and it's decaying faster than a one-month option for that reason you could make a point that Weekly options are slightly better than monthly options but they are more work and the Compensated amount of money that

you make is very minimal let me show you an example right now weekly income versus monthly income this is a big debate within my Discord community and many folks like to go for weekly income because it's more attractive and they like the frequency of it however I want to argue the point that Weekly income and monthly income are very very Sim similar so if I go to sell put for apple and I go for something that's going to Expire in roughly a week and I go for the 225 strike here so this would get you

$126 okay that would be one week but if we go for a one month option okay and we still go for the 225 option is going to be $370 so the fact of the matter is weekly option trading is a little bit more profitable you can say because this is 370 okay and and before we were looking at an option that was going for 126 well 126 * 4 is going to be about $500 so in a week you can make let's say about $500 but in a month you can make about $370 however let

me tell you this that if you're doing short-term options a you have to do a whole lot more work b in a week a lot more can happen whereas in a month the stock will stabilize a bit more so the reason why you get paid a little bit more on a weekly basis is because there's more risk and there's more work to do with managing the Position however on a monthly basis you get paid less but you lock it in at a much safer rate okay so there's actually a discrepancy here weekly income is more

attractive in terms of returns by a little bit but investing in monthly income is safer and more passive and on a long-term basis I have not found there to be that much difference between weekly trading versus monthly trading although I will admit weekly Trading is slightly more profitable but I would say That the returns of weekly trading are only about .1 to .5% more per month so if you think about it yes you can squeeze out an extra 5% per year if you're selling weekly options however the risks are going to be higher you're going

to have more variance it's a lot more work and it's a lot less passive and it's more active trading finally let's talk about premium the payment you receive for sell selling options and selling put options to be specific the Amount of Premium depends on several factors including the current price of the stock the strike price the time until expiration and the Stock's volatility volatility is a key factor the more volatile a stock is the higher the premium you can collect because the risk of the stock price moving significantly is greater and you get compensated for

that risk it can be very awesome being an option seller it is very awesome but keep in mind that with Higher volatility comes higher risk risk as the stock price is more likely to drop and cause you to be assigned on the shares again if you don't mind getting assigned that's fine if you're selling puts on stocks that you do mind getting assigned you really shouldn't be but it can be very lucrative to chase higher premiums and higher volatility because that's more money in your pocket now that you understand the mechanics let's dive into a

strategy that you can use to Consistently generate income from selling puts this strategy is straightforward but it's highly effective especially if you stick to it over time Step One is picking the right stocks you don't want to sell put options on just any stock that is the biggest mistake the key is to focus on highquality companies that you'd be happy to own if you're assigned shares look for companies with strong fundamentals solid earnings and a long Record of stability these are typically large well-established companies with strong balance sheets think of Apple Microsoft Johnson and Johnson

Google I mentioned some of these stocks already but it is imperative that you just stick to top S&P 500 stocks if you want consistent cash flow and you want retirement income otherwise you're going to experience more volatility it's also less beneficial to sell put options on smaller cap companies because they have Less liquidity in their options they have worse bitas prices they have worse volume they have a lot worse conditions for a put seller step two is choosing conservative strip prices the strike price is critical because it determines your risk level I'll be honest if

you go for higher you know Deltas you're going to be a signed more often and that gives you less margin of safety the more conservative your strike price the less likely it is that the option will be Exercised and at the end of the day less chance of being exercised even if you pick high quality companies less chance of being exercised is still going to be lower risk but the lower premium that you're going to collect so it is a direct tradeoff some my students ask why don't we just sell options and sell puts that

have a two or five Delta very low chances of things happening is cool very low risk but it's also very low return and you probably want to balance your Return and I would say very low returns are just not that attractive why would you be selling options looking for small income you should be looking for big income big consistent income so A good rule of thumb is to choose strike prices that are typically 5% or maybe 10% below the current stock price and that's why I like to look at options that are 30 Delta when

I show you the research later on in this video you will see that I go for 30 Delta because it gives you the Best mix of both return and low risk and this is where Delta is very important because Delta helps you accurately choose a proper strike price and manage your risk very effectively and Delta is going to be something I'm going to cover in great detail later in this course going out of the money gives you a cushion and in case the stock drops but also make sure that you're not taking in too much

risk step three is to keep the expiration date short options that Expire in 30 to 45 days offer a sweet spot for premium collection lower risk and not that much work as much as weekly options are they provide enough time for you to earn a decent premium without tying up your capital for too long shorter term puts honestly plus these options reduce the likelihood of Major Market events so it is really beneficial to go shorter term in many ways but a one-month option is honestly also considered shortterm but selling weekly Puts is even better in

many ways better because you get a lot of feedback and in one week usually not that much happens so when you sell weekly put options you get to see your results you get to count your money every single week so it can be really fun but for me as someone who is retired and working with other folks that are trying to get to retirement I do like to go to one month it's a little bit lower on the income a little bit but it's just way more consistent and it's Way easier to just manage the

beauty of this strategy is that it can be done repeatedly once the option contract expires whether it's exercised or not you can simply sell another put and collect another premium this creates a cycle of consistent income generation even if you're eventually assigned the shares you can still sell covered calls on the stock to generate even more in come a strategy will save for another video now let's address a common concern What happens if the stock drops significantly and you're assigned to shares this is where risk management comes into play first if you've chosen high quality

companies that you believe in for the long term owning the stock at a discount shouldn't be a problem in fact it can be a great opportunity to buy a stock that you love at a lower price what if the stock drops much lower than the strike price here's where the premium you collect upfront provides a Cushion or a margin of safety for example if you sold a put with a strike price of$ 45 and collected a $200 premium your actual cost basis for this stock is $43 per share this means the stock would have to

fall below 43 for you to start losing money and even then you could choose to hold onto the stock until it recovers or sell covered calls to generate additional income risk management is crucial when selling put options one of the biggest risks is a Sudden SHP sharp drop off in the stocks price this could be due to market crash bad earnings or some other unforeseen events to protect yourself consider selling puts on multiple stocks across different sectors diversification can help you reduce the impact of any stocks price drop significantly that's why I always recommend having

10 to 15 stocks in your portfolio another way to manage risk is choosing stocks with lower volatility volatility can be measured by Looking at the stocks in implied volatility or by using the stocks beta beta is not something I mentioned on this channel but beta gives you the understanding of how a company compares to the overall market so a One beta means that the stock would move equally with the market and a two beta means the stock is twice as volatile as the market so now you might be wondering how much money can you really

make from selling put options well the answer depends on The stock the strike price and the expiration dates and of course the capital that you're investing typically you can expect anywhere from On The Low End 1 to 3% of the stocks value per month on the higher end 2 to 4% per month depending on the Stock's volatility that might not sound like much at first but it adds up quickly and over the course of a year you can make something like a very small return of 12% which to be honest with you I Haven't made

or my average return which is roughly in the ballpark of 30 to 50% because I am collecting premiums that are roughly three .4% per month on average so if you look at the annualized return of that it's actually really big if you have a portfolio that's 50k Plus or 100K plus selling put options will definitely add up for example let's say that you sell a put on a stock worth $100 and you collect a premium of $2 for one month contract that's a 2% return on Your investment in just 1 month if you can repeat

that process every month you'll end up with a 24% yearly return by the end of the year far exceeding the average stock market return and if you're selling puts on multiple stocks your income potentially increases even more while reducing your risk selling put options is all about consistency and stacking those premiums month after month over time those premiums can compound helping you to build wealth and Generate a steady stream of passive income let's be clear selling puts is not without risk while the strategy is less risky than buying stocks outright there's still the possibility of

being assigned shares in a down Market as I'm going to explain shortly I actually consider it pretty much a non- losing strategy with almost no risk at all but I want to explain to you what the risk is if you do get assigned and why it can be bad although it's usually not if You're not comfortable owning the stock or managing the risk this strategy might not be right for you because you don't want to sell puts on stocks that you don't like it's important to be prepared for the possibility that you can end up

holding that stock during a market downturn we can't predict Market market downturns so when you're selling put options you should definitely like the stock that you're selling put options on that said if you follow the strategy That I've outlined selling puts on high quality stocks choosing conservative strike prices and keeping your expiration dates short you'll put yourself in a strong position to succeed you'll put yourself in a very strong position to succeed that's the fact the key is to be patient disciplined and stick to your original plan plan accordingly over time you'll see how selling

put options can become a powerful tool in your financial Arsenal Honestly if you want to retire early you should be selling puts it's such a fantastic way to generate passive consistent income you're getting paid upfront reducing your risk and potentially acquiring stock at a discount it's a strategy that can work for both beginners and experienced option Traders if you want to FastTrack your journey to Financial Freedom and retire early selling put options should definitely be your number one or your Number two tool in your option Trading so what's next well start by researching high quality

stocks that you like to own practice selling small conservative put options and track your progress now that you understand the core strategy and how it works let's get into something deeper more advanced techniques that can take your put selling game to the very next level while selling puts is already a great way to generate consistent income there are methods and nuances you can Apply to further optimize your returns reduce risk and build a portfolio that can lead you to financial Independence one key concept we need to understand is the idea of cash secured puts you

may have heard of this term before but if not let's break it down when you sell a put option you're agreeing to potentially buy 100 shares of a stock at the strike price if the stock drops down below that strike price you get assigned at expiration you'll be obligated to buy Those shares for example if you sell a put option on a stock at a 50 strike price that means you're agreeing to buy 100 shares at 50 $50 per share each or $5,000 worth of stock a cash secured put means that you have the cash

available in your brokerage account to cover that purchase if the option is exercised in our example that would mean having 5,000 in your account ready to buy the stock if necessary this is essentially the risk management strategy that you need To be aware of because it will happen from time to time and you need to be ready to acquire a stock but if you like the stock basically there's no issues at all this is an essential risk management strategy because it makes sure that you won't be caught off guard or forced to sell other assets

to cover your obligations why is this so important without cash securing your puts you could be left scrambling to find the funds to buy the stock if the option is Exercised worse if you don't have the cash and your brokerage account is on margin you could face significant interest charges or even margin calls by keeping your puts cash secured you're not only protecting yourself from Financial strain but you're also ensuring that you're trading strategy is both conservative and sustainable let's take a moment to look at why this approach is so effective cash secured puts are

an extremely low-risk way to Enter the stock market compared to buying stocks out right think about it if you want to own a stock but don't want to buy or pay full price for that today selling a put basically effectively sets your own entry price you get paid a premium UPF front and if the stock drops to your desired level you get to buy it at a discount so you get paid to buy a stock for lower than the Stock's current price on the other hand if the stock doesn't drop and the Put expires worthless

you've just pocketed the premium without ever having to buy the stock either outcome sounds amazing right but it's important to understand that selling naked puts plus puts without the cash backing them up is much riskier and for the purposes of this guide we're focusing on the safer cash secured approach that can help build long-term wealth now let's dive into some specifics of choosing the right stock and the right option Contracts to sell remember the core idea here is to only sell puts on stocks that you wouldn't mind owning anyways if you're selling puts on speculative

or high-risk stocks you could end up owning shares of the company that's not really a company that you want to own and if there's a serious downturn which could end up happening you would end up tying up your capital in a not so favorable company that's why I recommend focusing on Blue Chip companies companies with Strong cash flow well well established businesses with strong fundamentals and a track record of steady growth these are stocks that you can feel comfortable owning even if they experience some short-term volatility but how do you choose the right stocks here

are a few criteria to keep in mind One Financial strength we're investing in businesses we need them to have strong financials look for companies with strong balance sheets consistent Revenue growth and Healthy cash flow those are companies that can weather economic downturns and are much less less likely to experience significant long-term declines in the stock market and stock prices now also look for industry leaders focus on companies that are leaders in their industry these are businesses with competitive advantages whether it's through market share brand strength or proprietary technology the likelihood of long-term appreciation in those

stocks Is much higher than in smaller less known companies another excellent characteristic is to look for companies that pay a high dividend if you do get assigned the stock owning a company that regularly distributes dividends adds another stream of passive income on top of the premiums that you've already collected so paying dividends is actually a very good green flag on a stock once you've identified a stock you want to sell puts on the next step is Choosing the appropriate option contract here's where the balance between strike price expiration date and premium really comes into play

as I mentioned earlier it's often a good idea to sell puts with a strike price of 5 to 10% below the current market price this creates a cushion and increases the odds that you won't have to buy the stock at a higher price than what you're comfortable with but it's also important to consider stock volatility higher volatility means Higher premiums but also greater risk that the stock price will drop sharply and you'll be assigned the shares for example a Technology stock might offer a very attractive premium but the risk of a big price Wing is

much greater than say a consumer staples company like craft hindes or Proctor and Gamble when it comes to choosing the expiration date remember that short-term options provide faster income while longer term options give you more premium but you have to Wait a longer period of time typically 30 to 45 days until expirations that is the strike that strikes me with the perfect balance pun intended I guess you've given the stock enough time to move in your favor or to not move at all because when you're selling put options you don't actually need a move in

the stock the stock can just go sideways and that would be pretty good because you end up collecting your premium and nothing really happens now if the stock Moves down you end up buying a stock that you're potentially excited to own anyways now here's an advanced tip the timing of selling your puts can significantly impact the premium that you collect premiums are influenced by a variety of factors but one key factor is implied volatility of the stock implied volatility measures the expected volatility of a stock over the life of the option and directly impacts the

option's price when implied volatility Is high option premiums are also high and that's a good time to sell options when implied volatility is low option premiums are also low so how do you use this to your advantage one way is to sell puts during periods of Market uncertainy or volatility although many people are afraid and there's fear in the market for me that's actually exciting I'm actually happy to sell puts during that time for example when the market dips or during earning Seasons Implied volatility tends to be really high it spikes so by selling puts

during these times you can collect higher premiums then you would during a C Market however keep in mind that while higher vity brings in higher premiums it also increases the chances that the stock price may move against you this is why it's important to sell puts on stocks that you're comfortable owning even in volatile market conditions so the market pulls back you end up getting Assigned you're fine with that another Advanced technique is known as rolling your put option as you guys know I do love rolling options but it is a case-by casee basis and

during my one-on-one coachings and where I send text And Trades I do Focus a lot on rolling because a good roll can really adjust a losing position or further the gains of a winning position rolling involves closing out an existing option position and opening a new one with a later Expiration date or a different strike price this technique can be particularly useful if the stock price is close to or below your strike price and you're at risk of being assigned to shares instead of letting the option expire and potentially buying the stock you can then

roll the position forward collecting additional premium and pushing the expiration date further into the the future for example let's say that you sold a put option with a strike Price of $45 and collected a $2 premium the stock is now trading at $44 and the option is set to expire in just a few days you're at risk of being assigned the shares but instead of letting that happen you could buy back the put option that you've sold close out the position and immediately sell a new put option with a later expiration date perhaps 30 days

out or 60 days out and a similar or slightly lower strike price this allows you to collect more premium and defer The risk of assignment essentially you're giving yourself more time for the stock to move in your favor and you're adjusting the strike price so you're able to manipulate that strike price by several dollars and in most cases in 30 days you won't have any negative consequences you can typically roll for zero cost if it's just a few dollars in 30 days or you can roll by much more than a few dollars if it's more

than 30 days rolling options is a more advanced Strategy but it can be highly effective in situations where you want to avoid buying the stock at the strike price or when you believe the stock price will recover over time it also enables you to continue collecting premium income which can add up significantly over the long run at this point you might be wondering what are the implications of selling put options after collecting regular premium income that sounds great but how is that income taxed in most cases the premium That you collect from selling put options

is considered short-term capital gains that means it's taxed at your ordinary income rate which would be higher than the long-term capital gains rate however if you hold the option for more than one year before it expires or is exercised the premium might be taxed at a long-term capital gains which can result in a much lower tax rate if the option expires worthless the premium is taxed in the year that the option Expires if you're assigned the stock the premium is factored into your cost basis for the shares for example if you sold a put for

$50 strike price and collected a $2 premium your cost basis on the stock would then be $48 per share not 50 not all Brokers just do this and taxes varies from state to state and rules can VAR with the IRS so please do consult a professional Tax Advisor and don't take this as tax advice I have a lot of experience and I always try to keep it Very simple so for me I'm always basically trading short-term capital gains I'm paying a lot of money on taxes for my option trades which is completely fine with me

because I'm beating the market by well over triple and quadruple in majority of the years it's also important to obviously consol the tax professional to understand how selling puts can fit into your overall tax strategy taxes can significantly impact your overall returns and strategies that Minimize your taxes and like tax loss harvesting like towards the end of the year I typically sell a lot of my stocks at a loss because I want to do some tax loss harvesting and actually improve my tax bracket let's break down how this could work in practice imagine you have

a portfolio of $100,000 and you're targeting a conservative annual return of 12 or let's say 24% % right 2% per month very very realistic this would mean earning $24,000 in in premium Income over the course of the year so broken down monthly you'd be aiming to generate about $2,000 in premium every single month 12 months out of the Year depending on the stocks that you're targeting the strike prices that you choose and the expiration dates that you select this could be achieved by just selling multiple put contracts across different stocks and honestly it could take

like 30 minutes a week not that much more than that to just get 2% per Month 2% per month is actually on the lower end I have many students that are making 4% or higher because they're selling puts on more volatile stocks like Nvidia so diversifying your put selling strategy is key to reducing risk you don't want to concentrate all of your options on one stock or even one industry by spending your put contracts across several high quality stocks and spreading that risk around you reduce the risk that one poor performing stock Or industry will

negatively impact your overall returns for example you might sell puts on technology consumer goods Healthcare and Financial stocks make sure that your portfolio is balanced and not overly exposed to any one area in the market here's another tip to optimize your portfolio for long-term success reinvest your premiums just like dividend reinvestment where your dividend payments end up buying you more shares of stock and then there's more Shares paying you more dividends you want to do absolutely the same because this creates a compound effect that each new premium that you collect ends up fueling your portfolio

and its overall growth allowing you to generate even more income with each and every single month that goes by and don't worry now I'm just explaining the theory but I'll get into details of how exactly to do this in practice if you guys want to basically not feel overwhelmed diversify Into 10 to 15 stocks and perfectly execute these trades and grow your wealth so let's look at a scenario where you reinvest your premiums say you collect $1,000 in premium in one month and instead of withdrawing that money or letting it sit in cash you use

it to sell another put option that new cont contract generates an additional $200 in premium the following month you do the same thing and over time those premiums snowball adding significantly to your Total returns this reinvestment strategy can shave off years of timeline to your retirement and financial goals snowballing and compound interest is one of the strongest factors honestly I know that you might be thinking to yourself this all sounds good in theory but can you go over the risks a little bit more Henry I really want to understand how to not lose money and

collect a safe consistent passive income and generate a stable return I'll say yes every Strategy does technically have some risk otherwise it would be too good to be true but the reason why I like selling put options so much is that the risk that you're taking isn't really that bad actually isn't any risk at all depending on your mindset the biggest risk of course is the stock price Falls below the strike price and you're assigned to shares well this isn't necessarily a bad outcome especially if you've chosen a high quality stock it doesn't mean that

You know you're not going to get get a sign it just means that if you get a sign you're prepared to hold on to that stock and you wanted it anyways say it's apple or Nvidia or another stock that you really like paler Etc if you want to own that stock then who cares selling a put option can't go bad stock goes up fine you made premium if the stock goes sideways you end up getting premium and the stock goes down you still got the premium but now you have a good stock That you like

now in a bare Market or during a big Market Corrections stocks across the board can fall including the ones that you've sold puts on if you're assigned multiple stocks during a downturn you could end up holding a lot of stocks that are temporarily underwater this is why having cash cushion is very important that's why selling cash secured puts is very important this is why having the cash cushion or maintaining a different Portfolio of stocks in sectors is absolutely crucial you don't want to be overleveraged or put all your eggs in one basket risk management is

about being prepared for both the expected and the unexpected moves in the market another risk to consider is the opportunity cost when you put your tying up money that would otherwise be invested elsewhere so you could technically miss out in opportunities to make money off of stocks that are very Bullish or stocks that are paying dividends and that's honestly okay I personally know many of my students that are okay with just collecting safe passive income from selling puts and they don't care about closing out you know having the craziest bull runs or trying to predict

the market or time the market I personally don't really believe in that as long as you're collecting safe passive consistent income I'm happy and many of my students are too because They want to have the low stress and basically have income that helps them not be in their like 9 to-5 job and have more freedom so again this is not really a bad risk to have at all if you're selling puts it's basically saying well I'm making consistent money selling premiums and at worst I'm ready to purchase the stock and get assigned so although if

you have enough Capital to buy the shares there's really no risk at all you think about it so I'd recommend To get the best of both worlds consistent income from selling puts and selling more aggressive puts on the higher volatility and more implied volatility stocks so one more thing to watch out for is liquidity not all stocks have you know actively trade to option markets that's why I do prefer to stick to Blue Chip stocks that have healthy volumes it's very very important so I always look at liquidity and liquidity just means how easily you

can Enter and exit a position because of how many trades are currently you know being placed so if the volume is good that's a very good sign so smaller lesser known companies are obviously going to have lower liquidity and as you know there are two sides of all option trades so if you want to enter or exit your position you're going to need someone else to essentially make the opposite trade that you're looking to get filled on and on small cap stocks um that's just really Not possible the bid ass spread is really wide and

you're going to be losing a lot of money so it's just really not worth it if the options market for a particular stock is il liquid meaning there's a low volume of people trading that particular stock the bid ask spreads can be wide which can impact your ability to sell puts you're going to be able to get filled but you're going to get ripped off on the price the bid ass spread is just a Difference between what buyers are willing to pay and sellers are willing to accept always check the liquidity of the option Market

before selling puts on a stock you want to trade in a market where there's a healthy level of activity to make sure that you're getting the best price for the premium that you collect now let's shift gears a bit and talk about the bigger picture how this strategy can help you retire early the beauty of selling puts is that It provides a way to generate income without having to sell your stocks or other assets this is especially important for people looking to retire early and live off of their Investments typically early retirees rely on withdrawing

a certain percentage of their portfolio each year to cover their living expenses this can be risky if the market experiences a downturn as you may be Force to sell stocks at a loss to fund your lifestyle so what are the next Steps if you're new to option trading I recommend starting small Begin by selling puts on a stock that you're comfortable owning and don't be afraid to experiment with different strike prices and EXP ation dates track your results learn from each trade and gradually scale up as you gain more confidence if you've been trading for

a while consider integrating put selling into your broader investment strategy use it as a complement to your existing Portfolio and create Diversified income stream that you can weather very different market conditions but before I go into some more specific examples and show you more live trading and different strategies with selling put options let's talk about the common mistakes that people make when selling put options whether whether it's picking the right stock selecting the ideal expiration date or calculating your strike price with Precision every Decision can make a difference and how successful you are with selling

puts one of the biggest mistakes people make is choosing the wrong stock to sell puts on many Traders especially beginners they get excited about high premiums and they see the volatility and they see speculative stocks and they see it as an opportunity that can be very dangerous they see a put option offering a huge payout they jump in without considering the risk and most of the time that does Not really go well remember when you sell a put option you're agreeing to buy 100 shares of a stock at the strike price if the option is

exercised if that stock plummets in value you're stuck holding a significant loss and if you don't like that stock you're in a very bad situation for example let's say that you sell a put on a small cap biotech stock that's trading at $30 per share stock is very volatile but the premium is high so you're tempted to take the Trade but if bad news comes out like an FDA trial a failure or a negative earnings report the stock could easily Plum it down and drop to $15 or lower you'll be obligated to buy the stock

at $30 per share now you're sitting on a 50% loss and you're stuck holding a speculative stock with no guarantee that it will recover listen when a stock falls down 50% if you do the math if you go from 30 down to 15 that's a 50% drop to go from 15 to 30 you need 100% gain You're in big trouble that's why Warren Buffett says don't lose money and rule number two is follow rule number one this is why it's crucial and it's super critical to only sell puts on high quality fundamentally strong companies that

you personally believe in long term not me personally not your friend personally I see that all the time a friend recommends a stock you buy the stock stock goes down yeah you're not confident on it Because your friend recommended it do your own research it's really important to understand the stocks that you're investing in you can copy my TR of course I have that in my Discord Community um you can see everything I'm doing but even myself I would prefer to teach you how to do it for yourself so you have that strong confidence and

every time that you enter a stock you know exactly what you're doing and why you're holding and you never lose the Confidence because once you lose the confidence you start making more mistakes another mistake is selling puts with strike prices that are way too aggressive just way too aggressive new Traders often think that because they don't mind owning a stock they should sell puts with strike prices that are very close to the current market price or even slightly above while this will give you a higher premium a front it also significantly Increases the likelihood that

you'll be assigned the stock the key to selling put successfully over time is to give yourself a margin of safety aim for a strike price that is 5 to 10% below the current strike price this way if the stock experiences a short-term dip you won't immediately get assigned you'll still have some room for the stock to recover before you're forced to buy it which is very important that margin of safety is really a game Cher now let's Move on to the third mistake ignoring implied volatility implied volatility is one of the most important factors in

determining the price of an option contract yet so many Traders Overlook it when selling puts IV represents the Market's expectation for future volatility not past future okay so when you see IV it's what the Market's expecting it's hey we think there's going to be a lot that can happen here in the near future so selling puts when Implied volatility is low means that you're collecting less premium for taking on Lower risk on the other hand selling puts when implied volatility is high can result in much higher premiums but it also increases the risk that the

stock will move significantly against you so the trick is as most things with life you need to find balance you need to find balance to where you sell options the strike price and the expiration ideally you want to sell puts When implied volatility is a little high but not so high that the stock is Extreme ex volatile this way you can maximize premium you collect while minimizing the risk of large unpredictable price swings another mistake to avoid is not managing your trades properly once they're in play once they're actually in play the management of the

strategy is the most important some Traders make the mistake of setting it and forgetting it while That is fine for many trades it's not always fine in every situation they sell a put they collect the premium and then wait until expiration without actively monitoring the trade and understanding that if it goes into the money or hits a strike what they should do about it while selling puts is often a relatively low maintenance strategy it's still important to keep an eye on the Stock's price movement and market conditions because they can change and if the stock

Drops below or close to your strike price before expiration you may want to consider rolling out the option to avoid assignment this gives you more time for the trade to play out while collecting additional premium lastly let's talk about the mistake of overextending yourself selling options requires cash secured approach meaning you should always have enough cash in your account to buy the stock if the option is exercised some Traders make the mistake Of selling too many puts all at once tying up more cash than they should this not only increases the risk in your portfolio

but also limits your flexibility if the market moves unexpectedly be mindful of your cash reserves and don't sell more puts than you can comfortably cover okay it's much better to start small and scale up as you gain experience and confidence and then to go you know all out right away and to sell a bunch of put options and Then you know have way too much get assigned to and all of a sudden you have no cash you have no flexibility and you know it's not that bad because selling a put you get into high quality

companies but still you want to scale into the market now I want to talk about how much I will recommend as a percentage of your portfolio to allocate to cash secured puts and how that would look like okay so I have a lot of students that they love a certain stock and they just Invest tons of money into one stock that could work but let me tell you what the best practice is and let me actually pull out my portfolio right now and show you like a real example of how uh this is actually called

asset allocation it's extremely important it's actually what Goldman Sachs um really focuses on they focus on asset allocation with their clients so look my portfolio is currently at over $3.6 million I've been on this journey for a very long time Over the past 10 years and I've learned a lot of this stuff from Goldman saxs from working in the industry and from getting a degree in this and I want to say that asset allocation is something that's very overload looked from an investor standpoint a lot of investors just completely overlook this and I think it's

one of the biggest mistakes because look asset location means how much money you have in each position which means that asset allocation is Really your risk management it's really how much risk you have on each position all right if I look at my portfolio I'm going to go into some of the stocks that I hold and I have many sellp put positions but obviously at some point you do get a signed on a sell put then you start to have stocks right and that's where run the wheel strategy and other videos that I do have

on this channel um that you can check out around the wheel strategy but look when it Comes to selling puts you want to have similar asset allocation to what you want your end goal to be like right let me explain that if you are selling puts 10% of your money you have 10 positions that's good if you want 10 positions in your portfolio that's really good so for example if I go into my portfolio you'll see I have apple I have 41% or 42% of apple right now all right if I go to Walmart I

have 18% of my portfolio in Walmart if I go to PayPal I have about 6% of my money in PayPal so when you sell puts you want your end goal to be this I'm okay getting assigned this put if I own this put I'm okay to have 6% of my money be in this put or this position and that's how you want to plan things out you want to have your end goal in mind from the beginning is that interesting planning ahead so so when I come when it comes to my recommended percentages of of

your portfolio and how you should allocate it it does depend on Your personal risk preferences but I'll tell you a rule of thumb you should have 10 to 15 stocks some of them should be a little bit higher in the volatility so for example I don't know if I have Nvidia in this portfolio I have two portfolios but Tesla for example I just recently bought a th000 shares of after Tesla's had some volatility so you can see I'm a little bit down on Tesla I'm not worried I put a th shares on the line I

have market Value of 27 $1,000 on Tesla and it's about 8% of my portfolio so I'm just slightly under my average cost and we'll talk about average cost later on in this video um but listen I'm fine with that I I sold some puts um I got a sign and I'm I'm happy I mean I'm happy I bought some shares and I sold puts on this position and I'm excited to hold Tesla I think it's a very bullish position for the future so look for me it's 8% of my my portfolio that's perfectly in line

with 10 to 15 stocks I'm not a fan of timing the market Market but I do think there is such a thing as good and bad timing for example during periods of Market uncertainty or fear implied volatility tends to spike as investors anticipate large price movements this is often referred to as the fear gauge and it can be measured by the VIX Index this index the vix tracks the Market's expectation for volatility when the vix is high premiums on put options are generally Higher providing an excellent opportunity to sell puts and collect more income here's

a brief clip of me looking at the vix okay so the example that I want to show you using the vix is actually a very important one because you can learn a lot from the vix so over the past 6 months and I am recording this a little bit in the future as this course took me a lot of time to make as of like December 20th essentially you can see that the vix was really really Low and we were in a really big bull market so it's really easy to make a lot of money

and it's still easy to make a lot of money into 2025 but there was an economic event with fed Powell basically saying that you know we don't have interest rates under control as much so this is a big part of the reason why the market went down you can see how the volatility actually increased from 13 all the way up to 27 it doubled all right so check it out what you want to Look for when it comes to the vix is when it's really really low you actually can buy options and when you're selling

puts it is not as lucrative so you can sell puts at a much higher Delta okay you can increase the Delta to 35 to 40 and for some some specific stocks that are really safe and have low implied volatility already you can even sell like right at the money put options that are even 45 Delta or 50 Delta because even selling a 50 Delta option it it's Still really lucrative it still is better than just buying stock out right because you get a better price than the current stock so my portfolio is scaling to $5

million and we're on our way and we've been making a lot of really good results I want to go into a position right now to show you what selling a put with look like at the money so yeah apple and Tesla a lot of the stocks that I picked have absolutely printed money and I want to take a look at a stock That hasn't risen as much as the market so let's go let's use Target in this example so when a Stock's at a 52 we High you don't really want to sell puts that's why

I don't want to pick Apple that's why I don't want to pick some of the really high flying stocks actually Nvidia could be a really good one since Nvidia in you know at the end of December if you're watching this in the future it doesn't matter obviously this course is teaching you throughout all of Time time how to invest and sell put options for income the Nvidia right now the position that I have is actually really interesting because it's right at the money you can see here nvidia's at and I have a position expiring today

which is going to be the Nvidia 132 sellp put option so this is right at the money you can see how I'm completely okay with that because what happens is options really Decay a lot as they approach expiration and on the very last Day you can see how Nvidia is going to open up at 1 over 13 2 so I'm going to make $415 just today on this position so you can see how options and selling put options they can really have a big impact especially when it's at the money and the very last day

which is why I typically recommend that you hold a sellp put option position until the very last day until expiration because only a couple of things can happen either get a signed on a stock that you like or if It's really close you're going to make a lot of money in terms of theta and time Decay or three you know it expires out of the money so that's fine as well but you can see here how it's right at the money so when I'm looking at vix this is actually a really good opportunity because as

vix goes up right it's it's high right now which is actually a good thing when you're selling put options so you want it to be higher actually let me tell you this if vix is at its very Highest that is the best time to sell put options because implied volatility is high in the market there's a lot of fear in the market and because vix is inversely correlated to the stock market meaning when the stock market goes down vix goes up when there's High vix it gives you two big benefits one benefit is essentially that

high vix means higher premium and then High vix also means that the market has sold off so you're actually getting a discount so Vix is kind of like your friend and when vix is really low you should be a little bit more cautious around selling put options you know then again it is also an individual it's individually based so if a stock is really low on the RSI I'm going to cover technical analysis actually a little bit later but the gist is high to wrap it up hi vix is a good thing when it's really

low vix be careful when selling put options and when a stock is at a 52 week low low That's a really good time to sell put options even if it's not at a 52 we low that's fine as well just avoid stocks that are at very very all-time highs because there's better strategies to use when a stock is just going up and up and up just like P call options but if you want to focus on selling puts which is what this course is about it is I'm going to show you some more indicators later

on in this course if the market is very uncertain and people are afraid There will usually be high implied volatility that high implied volatility is actually a good thing if you know how to take advantage of it during period of Market optimism there will be usually very low implied volatility because everyone's optimistic and they think that they can predict the market and that will be a sign that um volatility will be lower during those times and with lower implied volatility you'll have lower premiums so you might focus On selling puts with shorter term expiration dates

to generate more frequent smaller premiums this way you're still generate income even if the premiums are smaller and you're minimizing the time that your capital is tied up you always want to have your Capital working for you in generating income that's my whole goal generating safe passive and consistent income understanding Market sentiment can also help you identify the best stock to sell Put on during the bull market or a strong bull market fundamentally sound companies tend to perform very well making them ideal candidates for selling puts in bare markets or periods of uncertainy you may

want to focus on defensive sectors such as Healthcare or consumer staples which tend to be more resilient especially because those companies have a lot of cash flow and strong cash flow is a really good sign um because that company has really good Stability and more investors will have demand for that stock even in the bad times so these sectors may offer lower premiums but they come with less risk of large price declines now going over to the next section I want to talk about companies to focus on when selling put options one of the most

important aspects of selling put options is selecting the right companies to trade as I mentioned earlier you want to focus on high quality fundamentally strong Companies that you wouldn't mind owning if you were assigned the shares like apple Microsoft Google Proctor and Gamble yep that's the company that toilet paper and toothpaste and all that and Johnson and Johnson you know you're everyday products these companies are going to be very strong fundamentally these companies are ideal candidates for selling puts because they have strong long-term growth potential and their stock prices are less likely to Experience wild

swings they have very predictable returns which is a very very good thing especially if you want consistent returns without any of the Hass or the headaches but I understand if Blue Chip stocks are quite expensive for you in this case you may want to use other Blue Chip stocks that are just priced a little bit lower in Share value because when you sell a put option you do need 100 shares of those stocks in that case if you have a smaller Portfolio I'd like to say there are several stocks that I do trade even with

a smaller portfolio so look we're going to briefly go through my portfolio again I want to show you some stocks that are on my watch list that I think are really good and they're um priced a little bit cheaper okay so first of all I am going to go down into all my positions and let's change this to a last price so you can see apple is going to be over 200 Walmart um paler is really good paler is A stock that I've been in for a while had paler since it was uh $16 per

share and Below but now it's at $42 it's it's a little bit cheaper in terms of price American Airlines is my Golden Goose American Airlines is person ly Golden Goose stock that I've been trading over and over again if I click into it and you look at the three-month chart here very strong performance the one year chart strong performance and the five-year chart I wasn't trading it at This level so if I tap in here I wasn't trading it in the 20s I started trading it when it went to $10 per share and I've been

on YouTube since around this time period when it was $10 per share because I've been on YouTube for four and a half years yeah about 4 and a half years ago when the stock fell this is where I saw an opportunity I've been trading it ever since so if you look at 4 four and a/2 years ago was at about $10 the stock is currently at $13 so Over 4 and 1/2 years it has done nothing but listen selling put options has been money it's been a gold mine so what I do in my Discord

I literally just sell puts on American Airlines over and over and over and over again all the time it's easy money I mean look look at my options right now I'm up $730 these are recent positions this is a small this is a small portfolio trade this is small I'm up $730 and on the stock itself I'm up $24 it's easy money okay Easy Money a Stock doesn't actually have to move a whole lot for you to make money because as an option seller you're just looking to capitalize on the premiums you don't really care

if the stock moves up a lot or down a lot or sideways when you're selling put options you can comfortably make a very handsome and consistent income monthly in thousands of dollars without even taking on much risk so it is it's truly a really powerful strategy and I want to say that um if you're Selling options you can pick you can pick cheaper stocks and make good income I mean I have snap here snap is very strong around that $10 level as well I know that um I've had HS in the past HS it's a

decent company they do a lot of marketing they don't have a competitive Advantage guys just to be just to be frank and to be clear HS is a uh you know they sell Viagra they sell a minoxidil for the hair if you're balding they sell anti-depressants but their Products are generic right they just have generic products so their secret is really marketing which is to be frank a lot of companies their secret is marketing so they don't really have a competitive Advantage so they need to keep their marketing high and if marketing expenses go up

and advertising and Mr Zuckerberg wants to charge more money for his uh meta ads hims will have a problem so be careful with him but that is a stock there it is him right There uh it is a stock that you can sell put options on in the past three months the stock is up in the past year actually the stock is tremendously up so I have recommend in the past I'll be honest with you I'm not a genie and I have missed out on some of the gains on the upside on him so I

was planning to to to purchase it and then I I I mistimed it but I didn't make money or lose money so I'm kind of neutral on it right now but I think it's a really good Stock especially cuz it's on the cheaper side now there's some other stocks like there's sweet greens I used to um go to University of Pennsylvania and I would go to Sweet greens every day I mean I would just eat there all the time all the time the salads are pretty pretty good at the time though I was pretty broke

so the sweet green salad was actually expensive for me how times actually I was dreaming that one day sweet green salads would Not be expensive cuz I think I was getting some good salad for maybe $16 cuz I was getting like extra protein I was putting a lot of add-ins I think it was 12 or 16 and I was like a it's really expensive compared to Chipotle which was like $8 um I was spending double on on sweet greens I I do remember that it was hitting my pocket pretty hard back in college Pinterest is

a decent stock Oley is probably avoid that stock For now it's on my watch list but I'm not trading it other cheap stocks I mean yeah American Airlines is really that Golden Goose for me let me go to search here maybe I can find some so if you go to stock screeners Robin Hood has that feature you can see there's actually High implied volatility stocks which is uh really interesting High implied volatility there's also High options volume which is really nice there's 52 we low and there's 52 we High so Actually if you were trying

to sell put options I would actually do something around that 52 we low so I would look for stocks that are towards the lower end because look when you're selling a put option you're saying I'm ready to buy a stock right I'm ready to buy the stock at that price but if it's already at a 52 we low it's on likely to go too much lower in theory right so yeah you can you can take a look here there's not a whole lot on the Robin Hood here There's only eight of these let me go

back here let's go to High implied volatility here let's go to High implied volatility and take a look so a lot of these stocks are going to be not ideal so let me let me click into for example SPI energy SPI energy here yeah it's like a penny stock so this is like this is no good this is absolutely no good I would just stick to the Blue Chip stocks and look if you don't have enough you you you just need to have get the money Up so you can do the 100 shares it's it's

really important so now I want to talk about another category to consider which is dividend paying stocks for example there's fizer there's Coca-Cola there's Starbucks there's Exxon Mobile and the stocks tend to be more stable during market downturns and they offer very consistent dividend payouts and very good payouts selling puts on companies in these sectors can provide a lower risk way to generate income during An uncertain Market even though they have a dividend which in theory hurts the cellp put these stocks still have really good fundamentals low volatility if you do get a sign on

the cell put you're going to be in a good situation because you have a good quality stock that you're getting ass signed on and getting a signed doesn't hurt getting a signed just means that the stock stock is below the strike price at expiration and someone wants to exercise their Rights to sell you their stock at the strike price now what about growth stocks okay we've talked a lot about value stocks and the Proctor and gambles of the world what about growth stocks well selling puts on blue chips or dividend paying stocks is generally a

safer strategy there's also really good potential to sell puts on growth stocks particularly during periods of Market optimism okay grow stocks are companies that are expected to grow significantly Faster than the overall market and I've actually recently covered a new strategy on my channel which I've personally made up it's called the momentum wheel strategy which is where I find Trends on growth stocks to sell puts um to get assigned and then to sell covered calls to run the wheel strategy that is a strategy that I will drop down in the description or at the end

of this video when you finish the video it'll be on the end screen okay but I think that Selling puts on grow stocks is very viable and I do that all the time so I'm mixing things up because I think in this market we always need a uh mix things up and innovate and stay on the edge for uh creating safe passive income and safe passive income is a good goal but along that goal we have to take the necessary action and put in the work and do the research and that's what my job's about

I really enjoy doing some of that analysis I don't sit all day and do Analysis because I do a lot of one-on-one coaching with students as well but during my one-on-one coaching calls I'm doing analysis with them so all day it's analysis on the market I'm always trying to find a good price whether it's a blue chip stock or a dividend paying stock I'm always looking for opportunities on growth stocks or more of those stable stocks just to sell puts and generate income now these growth companies they often reinvest Their profits into expansion these companies

are growing quickly they have a lot of product development and marketing marketing is the lifeblood of a company companies all have marketing which typically leads to Rapid increases in the stock price over time that's why we see companies like Amazon like Tesla they run at negative earnings for a long time to really scale up their operations so they can one day be very profitable but they're looking for aggressive Growth think of companies like uh AMD Tesla paler Nvidia and and Amazon as I mentioned these are examples of growth stocks that have seen significant gains over

the years they're not the most profitable while they're growing but it certainly makes sense for the businesses to invest aggressively to gain market share and to grow so I also want to say however there are a few things to consider when selling puts on growth stocks that may be a little bit Different first growth stocks tend to be more volatile Than Blue Chip stocks or dividend paying stocks this means the potential for high premiums is greater but the risk is also higher because grow stocks are more prone to Sharp price swings you could find yourself

in a position where the stock price drops well below your strike price and your assigned shares at a higher cost than you really like that said if you're comfortable with the company or you're Comfortable with the company's long-term potential selling puts on growth stocks can still be a very effective strategy when selling puts on grow stocks you should be even more conservative with your strike prices because they have more implied volatility and you will get paid don't worry about that you will get paid but I would recommend you go a little bit more conservative aim

for a strike price that is significantly below the current stock price perhaps 10% or 15% or just go for my Stander rule which is 20 to 30 Delta this gives you a wider margin of safety and it reduces the likelihood of being assigned shares during a short-term dip and remember even even if you're assigned to shares growth stocks can recover quickly especially if the dip is related to Temporary market conditions rather than any fundamental issues with the company now another sector that I personally really like is technology the tech Sector has been one of the

best performing sectors in the market for years year after year it's one of the best performing you can see on screen right now Tech is a good performing sector and also it is my favorite sector to trade I have worked on Wall Street at multiple different hedge Fones and I have found that Tech sector is the best sector to invest in because there's the most productivity in that sector and we're getting the most uh GDP increase We're getting the most company increase the most market cap increase so it's generally growing a bit faster and I

do have a bias for tech companies as a tech analyst myself I spent a lot of time researching these companies I've also spent a lot of time researching Brands and consumer companies so I have a lot of experience there and companies like apple Microsoft and Google actually offer a bit of both okay they are Brands they're big Brands but they're also Tech Right they're Tech they're software they're consumer I really really like those type of companies so companies like apple Microsoft and Google are well known for their growth potential they have very strong balance sheets

and they're also relatively lowrisk long-term companies so they're they're very good to have in your portfolio to continuously sell puts now I would sell puts every month every two months every 3 months uh you can actually sell puts On multiple different expiration days and as we will go through examples in my portfolio later on in the live trading portion uh you you will notice that I I'm okay picking multiple different expiration dates so selling puts on established tech companies can be a very lucrative strategy especially if you time your trades around earnings reports or product

launches which can lead to increased premiums due to higher implied volatility we all know Apple goes for That yearly iPhone release right the iPhone 16 and during those times there is a little bit High tend volatility because the the market could um you know not take that with good graces for example maybe an iPhone it has a has a delay I mean there's always a little chance of something happening and option Market will adjust for that and they will price that in so if you're selling options you will get a little bit more money during

those types of periods that Said it's important to be cautious with smaller more speculative tech companies while these stocks might offer higher premiums they're also much more likely to experience large swings in the price especially if they're not yet profitable or still in the early stages of growth stick with established financially stable tech companies if you're looking to sell puts for considerable income and lastly let's not forget about the financials all right companies like JP Morgan Goldman Sachs and Bank of America these are considered Financial Blue Chips in tend to perform well in both Bull

and bare markets these companies also tend to have relatively High implied volatility compared to other sectors which means you can often collect pretty good premiums when selling put options now let's talk about how to manage risk when selling put options something that every successful Trader and I mean every especially one Selling put options needs to master while selling puts is generally considered less risky than buying stocks outright and it's certainly in my opinion one of the best strategies because it's part of the wheel strategy which is the best strategy but selling puts is the main

component of this strategy I still need you to be aware that there are important things you need to understand about selling puts and how to manage it because it's not without Risk by no means is it without risk the first and most important aspect of risk management is making sure that you have cash secured puts that means that account has the ability to buy 100 shares of that stock that you're selling a put option on all right which I have already explained earlier in this course and why it's so important but I want to re-emphasize

it because all the positions that I recommend should be cash secured all right you need to have The money available and in that way I truly believe this is a non- losing strategy it's impossible to lose because you get to sign a stock that you want to own you really can't lose because you want to own it and it's a high quality company and you're better off than other people who are just buying stocks you have a safe for price but please do not forget how much cash you're potentially going to need to buy 100

100 shares of the stock you pick um at the strike Price it's very easy what's easy to do is also easy not to do right I've heard that saying before so make sure you take that strike price and multiply by 100 and even if you do technically have enough cash in your account make sure that it's not the majority of your portfolio again risk management is asset allocation it's figuring out hey is this more than 20% of my portfolio if so this is way too much again these are the very basic things to be cautious

of that Greedy investors especially beginners will do and uh I've covered the biggest psychological tricks to to really making a lot of money it's also a full course that I want you to to watch because psychology plays a really big role in how you manage a risk the second thing is diversification so if you can afford to sell puts on multiple different stocks or or Diversified ETFs like spy or QQQ that's fantastic you should be Diversified you should be doing that and Those stocks that you pick should be in different sectors like I mentioned before

Tech Finance health in energy sector and Etc other sectors as well for example instead of selling a put only on tech companies although I I love Tech guys I I love Tech but you should be selling puts on a mix of tech Healthcare financials Consumer Staples that's the Proctor and Gamble I mentioned earlier um consumer staples are those necessary companies in the economy the toothpaste And the mouthwash type of stuff this way if one sector experiences a down turn your entire portfolio won't be affected you have different correlations some companies perform bad bad in low

interest rate environments some companies perform good some stocks fall when there's a market crash and some actually hold their value so you want that diversification diversification helps smooth out the overall volatility in your portfolio and it reduces the Risk that a sharp decline in one stock or one sector will have um an outsize impact on your total returns trust me you don't want an outsize impact on your portfolio you want your portfolio just to be chugging along smoothly on an upward trajectory but for those of you who have small accounts and can't afford to diversify

and sell puts I am going to recommend you something I'm going to recommend that you use selling puts but in a little bit uh more of an Interesting way in turnning a put into a put credit spread here's actually an example of how you can do that all right guys now when you're selling puts you can also make it a credit spread a put credit spread is super powerful because it requires a lot less Capital versus just selling puts out right so I'm going to show you the Nvidia example again here we are at 132

and I have a 132 cell put so what I can actually do let me show you this from scratch let me open Up a new position if you go to sell put right and you want to sell a put option but you're like H it's really expensive I want to reduce my cost this is what it would look like I'm going to go for an expiration day that's like March 21st 2025 all right so if I go ahead and I sell a put option we're going to go down I'm going to go for around a

30 Delta I'm just going to show you like an actual example that I would literally do myself I think 118 will be good so yeah That's a 30 Delta perfect okay so look if you sell this option right here obviously you're going to need $11,800 but I'm collecting 600 so this is actually a really good example because I'm collecting 600 here which is by my Max loss I'll explain Max loss in a second as well is 11,200 now look this Max loss is not really the max loss this Max loss is basically if Nvidia went

down to zero you would lose $1,200 in this example but Nvidia is not Going to zero so you never really have to worry about the max loss okay so whenever you sell a put option you have to you know put up 100 shares times you know the strike price so here we have to put up $1,800 but because we collect $600 in premium that means that our Max loss is only $1,200 so this 11,200 is what we have to put up and we're getting 600 in return that's really good right I mean that's a pretty

good return what is that it's Actually around five five or 6% right that's you know decent it's not a lot of money but certainly if you can do this every 90 days that's a 20% return per year and you know if you have a bigger size portfolio 100K and you want to scale it to 500k then you know 20% return you know per year is is good it'll definitely get you there to scale up in the safest way possible Right selling puts is the safest strategy hands down it's safer than just Investing in the stock

market so but if you want to scale faster and if you want to put up less Capital here's what a put credit spread would look like it's really simple actually so instead of selling a put option now you're just going to go to buy put option and instead of going for 118 you want to go lower so we're going to pick an option that's lower than the 118 and this is essentially going to create a cap on how much much money we can lose it's also Going to reduce the capital that we have to put

up so I do typically go for a $5 spread right but here since I did pick a little bit of weird number so if I did 120 I can easily do 115 but I picked 118 so there's no 113 strike price right now on Nvidia as I'm looking at it so instead there's nothing wrong with that you can still create a poed spread that's not a $5 width you can create one that's a $1 width you can create one that's $3 you can create one that's $8 Or or $10 and so on and so forth

so I'm going to create actually you know what I can create one that's $10 wor all right so this will be a really easy example so now what you'll see here is if I go ahead and I buy the 108 now my Max loss went from like 11,200 which again the max loss is not the issue the issue is that it is capital intensive you know for some folks they don't have all that Capital to put up you know most folks do but you know if you don't or even if you Do you want just

more return for less like upfront capital or less risk although this put credit spread strategy is a little bit higher risk than selling put options because when you sell a put option the worst thing that happens is you get assigned and then you know you can run the wheel strategy or you know just hold chairs whereas with the put credit spread you can't really run the wheel strategy and if it goes below 108 you do lose the capital that you put in In some cases you can roll that but in in most cases what I

personally do is I close the position once it hits in the money so Nvidia at 132 if it were to go to 118 you know I would think about closing out the position so I don't lose the full amount here what you'll notice is that we're going to be collecting a total credit of about about a dollar uh and that means that on this put credit spread position we're going to be putting up about $900 worth of capital So you make 100 and then you're putting up 900 which is 11.11% return all right actually I

want to take a look at the bid ask spread as well the bid ask spread here is not ideal although I am trading pre-market right now and the Market's not open as I'm recording this video this bti ask spread is really really really trash you don't want it to be this wide so you yeah this is a really bad as spread and that's why that's why the return is not That much more attractive what I'm going to do actually is I'm going to show you something I'm going to show you a much more attractive return

let's go for January 17 and I'm going to show you the same example but it's going to be a lot better because often times shorter term expirations do have better liquidity meaning there's a better better bid ask spread since there's just more people trading so if I go down and I still go for like let's say 120 okay this is Around you know 30 Delta so this is good it's actually even safer so if I end up selling this right right so if I sell and also I picked 118 and and 110 was a little

bit weird so if I go to this and then I go to buy 115 now this will be a $5 spread now you you can see here that I'm getting a dollar a little bit over a dollar but now I'm only putting up about $400 worth of capital this is a $5 width on a spread but because I'm collecting a total credit of 100 that means it's not Really 500 it's really 400 so I'm making 100 on 400 which is a 25% return and this 25% return comes in 30 days so this is essentially how

you can sell a put but then you can turn a put into a put credit spread you can either open up that position from scratch or what you can do is you can actually sell a put see what happens see how it's doing and then open up a buy order for a put option later on and basically turn a put into a poed spread it's more or less the Same thing in just the scenario one you do it at the same time which I prefer if you're going to open up a poer spread just make

it a put rette spread from the get-go but there's also you know nothing wrong with if you have sold a put option and then you buy put option later let's say that it's going against you it's going down you want to buy yourself protection that's also a really good idea because the buut option that you purchase it increases in value when you Know the stock goes down so if the stock is not doing so well I would say it's it's good just to close out the position in general but let's say that you don't want

to close it out and you just want to make a short-term profit and you think that the momentum on the downside isn't going to be lasting you just you know it's a bad day or it's a bad week or we have a little bit of a bare Mark in the short term then it can also make a lot of sense to to buy a put option as Well all right hopefully that was helpful so I want to point out that another aspect of risk management is monitoring your Delta if you don't know what Delta is

Delta is just a metric we use for option contracts to see how likely the option contract is to go into the money all right more specifically Delta measures how much the price of an option is expected to change for every $1 move in the price of the underlying stock NOW Delta is a measure uh on a Scale of 0 to one you can also have negative Delta I guess when you're selling options but let me explain to you in simple terms a 05 Delta means that it has a 50% chance of being in the money

for a put option specifically Delta is on a scale of 0 to1 but a 0.5 or negative 0.5 is still a 50% chance so the negative or the positive doesn't matter just look at the Delta just keep it simple here's actually an example of how I'm going to use Delta to Show you how to really pick a cellp put option using Delta all right guys so in this example I want to show you how to use Delta to select a put option Delta is actually like one of the most important things that you can do

for selling a put option because it tells you the level of risk Delta is essentially your risk gauge okay so when you look at Delta here's what I look for so I'm going to use Nvidia again and January 17 expiration if I take a look At the 115 option here as a 20 Delta what that means is there's a 20% chance of this option going down and expiring at exactly 115 or lower okay so a 20 Delta is really safe that means there's an 80% chance that this won't happen but there's a 20% chance that

Nvidia will go down to 150 so I use Delta as a gauge and for me I found my sweet spot to be around 30 Delta so I've done a lot of research I actually took this from a Goldman Sachs article when I was doing Research at Goldman Sachs I I think that what I saw was that between 25 to 35 Delta was really ideal it does depend on the implied volatility but to keep it really short and really simple you will make money on a long-term basis and you will put the odds in your favor

to be successful if you just go for around a 30 Delta so here you can see that Nvidia has a28 Delta implied volatility is 52 the volume here is amazing amazing amazing Nvidia volume Nvidia and Tesla AMD paler all the stocks that I made tremendous amounts of money on if you you know watch my channel regularly it's been an absolute money-making machine and that's because the options are amazing the volatility is good and it's just this is the best stock to trade in town like these big highflying tech stocks that's because volatility is your friend

when there's a lot of volatility there's a lot of opportunity so I'm always trying to spot opportunity And I'm always trying to you know tell my students my one-on-one students I'm like hey this is opportunity I see right here take advantage of it make some money and opportunities they come and go you know when I see them I always let my students know so you'll see here that Nvidia has a 28 Delta here and essentially Delta is just you know I usually go for 30 now for selling puts I will sometimes also to use 40

when the stock is just really lower volatility But I want entry into the stock if I really want entry into the stock versus buying the stock at the current price I'll just go ahead and sell a 40 Delta or even a 45 Delta when you sell a put option you benefit from the stock price staying the same or going up but you lose if the stock price goes down well let me clarify you don't really lose if it goes down because it might get assigned you get to buy the stock at a discount which is

actually a great thing That's the best thing about selling a put option it's what I refer to as a non- losing strategy because the worst that happens is you get assigned and you don't have a whole lot of risk management to do because if you get assigned well it's not really a big deal at all because you basically go in with the intention of getting assigned okay if we want to keep collecting consistent premium without having to manage our position too much it's better if the Stock stays the same price or goes up look if

it stays the same and just go sideways you won't get assigned getting assigned isn't bad but I'm just saying you won't get assigned so you really don't do anything and it's better if the option that you sold becomes basically worthless then you can basically sell a put option again and just go for that premium collection okay so if the stock goes sideways and does nothing it expires do it again sell another put Option and just keep going and sell puts until you eventually do get assigned the further the stock price is from the strike price

the lower the Delta will be meaning that the small price movement in the stock won't really have large impact on the options value because Delta also measured that sensitivity to that option moves so if this a low Delta and the stock moves a lot the option is not going to move a lot okay Delta measures sensitivity so keep that in mind but by Looking at your Delta you can get a sense of how sensitive your positions are to changes in the stock price if your Delta is too high you may want to consider adjusting your

position to reduce the risk you may close that option and open something up with the lower Delta and you can do that by Rolling the option to a lower strike price or um by doing it uh to a later expiration date Whatever Gets that Delta lower to really reduce that sensitivity That's going to benefit you if you want lower vaults overall and that brings me nicely into the next risk management tool which is rolling okay as I talked about earlier rolling an option just means that you're closing out your current position by buying back the

put option that you sold and simultaneously selling a new put option with a later expiration date or a different strike price this can help you avoid assignment if the stock is trading near um your Strike price or even below you can adjust it buy rolling while also allowing you to collect additional income so sometimes I roll for a net credit sometimes I roll for a net debit I'm going to show you an example all right so now I want to show you what rolling an option looks like and since I do have many many options

that are expiring right now I usually go to Total return and I see if any options are at a loss so right now I have just a lot of Gains all of these are gains and I'm trying to look for a stock where I might be a little bit down and if I'm down I might look at rolling that position so for the the most part I only have winners right now there's an Nvidia one but that's a that's a a little bit of a different strategy so what I'm going to do right now since

everything is essentially winning I'm going to show you what I can do with Apple so apple is just slightly down it's down 20 bucks Which it's good when you're just winning and you're coaching a lot of people and everyone's just winning around you it's just the most satisfying feeling I love that but this is kind of like the only losing I wouldn't even call it losing I'm kind of just flat on this cell putut right here what I would do is let's say that I don't know why you would be worried about Apple going down

to 235 when it's at 247 especially cuz this option expires like in 30 days or so However I'll show you what a role looks like I don't have the best rolling example since I'm successful on every trade at the moment but let's just say hypothetically that the stock was approaching 235 which is my strike price right here okay I have a 235 put option and let's say that Apple went down to 235 and you said to yourself well I'm a little bit nervous I'm not sure if I want to get the stock at 235 I

want to reduce my cost cost I don't want to Purchase it yet there's multiple reasons why you wouldn't want to right in most cases I do want to but what you would do is you would simply just find a different expiration date and then you would roll down I'll show you what that looks like right now and it doesn't matter what brokerage you're using you can use this on any brokerage the whole the whole point is you're increasing length of time because time for options is the most important thing like more Time means more value

for the option so it you know it allows you to collect income it gives you a net credit or even if you pay a debit it significantly lowers your price so I'll show you an example of both all right so look 235 I can easily just go down to well this is this is going to be super profitable no matter what as you can see I increase the time by 63 days and I'm getting a total credit of $2,900 that's because well these $63 Days mean a lot for for options so it's pretty crazy actually

you can see here how I'm moving from 235 down to 230 I'm literally saving $5 I'm going down by $5 and I get paid to go down $5 this is why rolling is super super good I'm going to leave a video down in the description about rolling options as well if you want more information on rolling options but I'm going to try to you know give you everything right now which is essentially rolling is the most powerful Thing that you can do to fix a position rolling allows you to fix a position it allows you

to adjust the position and allows you to make more money and and when it comes to selling a put option rolling is is really powerful although I will say that typically when I sell a put option I want entry so I don't need to roll but let's say that you don't want to the stock or it's crashed a little bit or it's there's a you know bare Market you know whatever insert the Reason why the stock went down and let's say that you change your mind and you're not feeling as confident anymore well either you

can close the position entirely or you can roll so in this example it's it's really really easy to roll for a profit right so I'm just rolling down by $5 and I'm getting $ 2900 so for example you can also roll down significantly like lower so you can go down for example let's say that Apple crashed for for whatever reason they had A bad iPhone release and the stock went down to 200 okay so first of all that would be like an extreme extreme event right if it went down that much it would be crazy

however even if it did go down that much you can see here how you can roll from 235 down to 205 so you would still be at a loss if if Apple went down to 200 but you would go from 235 down to 205 with just 63 days you can give it 63 extra days see what happens and then you can roll again nothing stopping you from From Rolling once twice three times and so on and so forth so you can roll and effectively get your average cost down to zero which is pretty crazy right

obviously you need a long length of time but imagine that every single you know 60 days or 90 days I could roll my position down lower and lower and lower for a you know credit or a small debit you can get the cost down to absolutely nothing I hope that example was helpful now look rolling can also be used Proactively to lock in profits for example if you sold a put option in the stock price has risen significantly the value of the option will have decreased meaning you can buy it back at a much lower

price than you sold it for you can then roll the position by selling a new put with a higher strike price or a later expiration date to continue generating premium income another important aspect of risk management is paying attention to your overall Portfolio size and the number of contracts you're trading one of the easiest ways to get into trouble with selling puts is by trading too many contracts relative to the size of your account remember each put option represents 100 shares of the underlying stock so if you sell 10 put options you're committing to buy

1,000 shares of the options that are exercised if they do get assigned or exercised make sure you're not overleveraging your account By selling more puts than you can comfortably manage finally don't underestimate the importance of having an Exit Plan even though selling puts can be a relatively passive strategy you still need to have a plan for what to do if the stock price moves against you and you change your mind on the stock so okay if it moves against you but if you no longer like the stock then you have to take basically some action

will you roll the option will you take assignment And hold a stock will you close the position for a loss and move on to another trade those are all questions that you must ask yourself and it does depend on a case-by casee basis which is why I do a lot of live trading in my Discord Community every situation may be different I'm trying to educate you as much as possible so look having a predefined exit strategy to be clear if you have a predefined exit strategy in place before you enter a trade and that Can

help you basically avoid emotional decision- making keep you focused on your long-term goals having an exit strategy is very crucial and that's it guys you can see that this is very little risk for this strategy and it's extremely straightforward on how to manage that risk now when you're looking to sell put options on a certain stock you might not know exactly what to look for and that is very important so um this is where technical analysis comes Into play technical analysis is very important and there's a big debate on Wall Street is technical analysis more

important than fundamental analysis others will say fundamental analysis is way more important than technical I would say let's be in the middle let's use both let's pay attention to technical analysis and let's also pay attention to fundamentals while fundamental analysis helps you understand the company's Financial Health and long-term prospects of a company technical analysis helps you identify short-term price trends support and resistance levels and Market momentum technical analysis to me is actually more on the psychological side it tells me what the psychology is of other people in the market which is extremely important I think

this is more of a psychological game than a mathematical game so for me I do like technical analysis a little bit more Fundamentals is also important if you use technical analysis correctly you'll be able to time your trades more effectively and increase your chances of success that's all we can do here I don't have 100% success rate Nobody Does anyone claiming High success rate typically is not really being that truthful in my opinion and I think it's much more important not to look at your um win rate it's much more important to look at your

um profitability how much Money you're actually making percentage and how much risk are you're taking and since this course is all about selling puts we want to use technical analysis to tell us which stocks are not likely to fall in the near future and which stocks if they were to fall what are the safe levels of picking strike prices for example let's say that you've identified a stock that you like to sell puts on but the stock is currently trading near or around the key support support level Support by the way is a price level

where the stock has historically had a hard time falling below as buyers tend to step in and push the stock price way back up it's like they're saying to the market hey this is too cheap of a price Count Me In I want to buy up a lot of shares at this price that's what support is if the stock is trading near support selling a put option with a strike price just below the support level is extremely smart it's genius okay the Support level provides an additional margin of safety it gives you another data point

I'm all about data you guys been watching my video especially on the psychological video that I recently posted must watch that video it's all about data it's all about mindset and if you're selling a put around the key support you're a genius because you have multiple things that are in your favor for that put not to go into the money again it's not a bad thing if it goes Into the money but if you can win nine or eight times in a row on a sell put and then you get ass signed you're putting yourself

in a very advantageous position similarly you can use resistance levels to time your trades resistance is the price level at which a stock has historically struggled to move above as selling pressure tends to increase when the stock approaches this level if you're considering selling puts on a stock that's trading near its Resistance level it might be worth waiting to see if the stock pulls back before entering the trade this way you can avoid selling puts just before a potential short-term dip which could honestly result in you getting ass signed which is again not bad but

if you don't have to get a signed and you know the levels at which you can sell puts you can do that over and over again and make it a repeat pable strategy of just collecting income over and over again so Now I'm going to share my screen and show you Yahoo finance and pick a good stock to show you some technical indicators on I'm going to specifically go over um selling puts using RSI and bowling your band and I think that using simple technical analysis will definitely help take your selling puts strategy to the

next level all right what I want to show you guys next is we're going to take a look at the RSI and the bowling band and some technical Indicators that I use to really find an opportunity to sell puts and enter into a stock that I want to own at the proper price because if you don't sell a put option at the proper price you know the stock could go down so you obviously want to be aware of that like if you sell puts at a stock that's 52 we highs like that's just not the

best idea however it really just depends on the technical indicator so even if a stock is at a 52 we High maybe the technical Indicators say otherwise here what I'm using is a Binger band so the Binger band here I'm just using the the standard 20 and two so I'll show you what that means so if you go to bowling band you can see 20 this means that it's going out about 20 days and two is a two standard deviation okay standard deviation you don't have to learn it essentially a standard deviation is just something

a little bit unusual from the norm think about it in terms of like Let's say human height okay so if you're a man you're 5' 10 your s is going to be about 5' 10 one standard deviation would be like 6'1 two standard deviations would be like 6'4 right so like Baron Trump is like a couple standard deviations above Donald Trump cuz he's like 63 and it sounds like 69 so it's really really tall so that's just what bonger ban is it's looking at standard deviation which is just like measuring what is normal and what's

not normal so You can see here that the range for NVIDIA would be 148 at the top or 128 on the bottom so that's essentially a $20 Gap here and that's where you can expect Nvidia to be like 95% of the time that's what the Binger band does it tracks like what's likely to happen like 95% of the time if you're using two standard deviations if you use three standard deviations then it's going to be essentially you know 99% of the time which you don't need that's a little bit Extreme and it's it's excessive you

don't need that because then you're not going to be able to trade at all you're going to be waiting for like a signal that's like really really rare so here what we're looking at is NVIDIA is at the bottom of its Binger band so this is very very cheap and this is the perfect time to sell put options this as perfect as it gets when a Stock's near 52 week low that's good when the stock buys Binger band bottom that's good so here Was at the bottom and it bounced here it went towards the bottom

and it bounced and you see inid doing bounces like that and right now I don't think Nvidia will go too much lower I mean we'll have to see what happens happens with the market here but this is a really good sign in general like you know you can't make a blanket statement say 100% it's always good but I'm telling you this is a really really strong indicator this is one of the strongest indicators hands Down that I use now when it comes to the RSI the RSI here is 36 that's also pretty low because as

it approaches like 20 that means it's oversold like really oversold but 36 is also really low so that's another good indicator once to sell a put option so if it's near the bottom of his Binger band that's good and if it's a low RSI that's also really good all right hope that was helpful and now look one of the biggest key benefits of selling put options is the Flexibility that it offers as market conditions change you can easily adjust and optimize your strategy to take advantage of New Opportunities or reduce risk let's talk about some

ways that you can fine-tune your put selling strategy as you gain experience first you can adjust the type of stock that you're targeting based on the market condition for example during periods of economic expansion growth stocks tend to outperform so you you might want to Focus more on selling puts on companies in sectors like technology consumer discretionary and Industrials these sectors tend to benefit the most from rising demand higher consumer spending and increase capital investment on the other hand during periods of economic uncertainy or Market downturns defensive sectors like healthcare utilities and Consumer Staples tend

to perform better these sectors are less sensitive to economic Cycles as they provide Essential goods and services that people need regardless of the state of the economy by shifting your focus to defensive stocks storing bare markets you can reduce your risk and continue generating premium income even if the broader Market is declining because you're in the safe companies you're in the companies that are going to be less affected and another way to optimize your strategy is by experimenting with different strike prices and expiration Dates okay this is actually a little bit more advanced this is

what I focus my one-on-one coaching students some of them have big portfolios majority of them have big portfolios right six figures and and we look at uh diversification across different expiration dates so as you gain experience with selling puts you'll develop a better understanding of how different strike prices and expiration dates affect your risk and premium Income you might find that selling puts with strike prices closer to the current stock price offers higher premiums but also increases the likelihood of assignment or you might discover that selling longer term options provides higher premiums but ties up

your capital for longer than you'd like tying up your capital for a really long time is good good if you're getting the money that you want but you don't want to tie it up for longer than it has to so by Experimenting with different combinations of strike prices and expiration dates you'll be able to fune your strategy to meet your income goals while also managing your risk effectively you can also consider incorporating Advanced option strategies into your overall plan one of my favorite strategies of all time is the wheel strategy even though this is a

course on selling puts selling cover calls just complement selling puts it Complement it so well that I think it's one of the most important strategies that you should watch because selling puts and covered calls together make up the wheel strategy so if you have these three strategies you have my three brand butter strategies and these three bread and butter strategies is how I've been making money predominantly with 80 or 90% of my Capital so you should definitely finish this video and watch my covered call in my wheel strategy Course which is the best course out

there on YouTube hands down so a covered call involves selling a call option on a stock you already own which generates additional premium income this strategy can be particularly effective if you're a sign shares through selling puts as you can immediately start selling covered calls on the shares that you own for example if you sold a put option on a stock with a strike price of 50 and we're assign the shares when the stock Price dropped to 49 you can just sell a cover call at 50 51 52 55 anything above or at 50 would

bring in income give you a perfect Exit Plan and this allows you to generate even more income while holding the stock and potentially benefiting from a bullish price movement if you sell a 50 strike obviously you won't have too much price movement because your average cost is 50 but if you sell a covered call um that's above 50 then you get a lot of upside so That's amazing so with the wheel strategy you'll be able to collect premium no matter if the stock goes up or if it goes down now let's talk about the psychological

aspect of selling put options one of the biggest challenges you'll face when selling put options is dealing with fear in uncertainty especially when the market moves against you let's be honest there will be times where the stock price drops near your strike price or even below it and you'll Face the possibility of being assigned shares at a loss and you may panic in these moments it's not about panicking it's about having strong mentality because if you panic often times it's literally the worst thing that you can do so you want to have that long-term mindset

many Traders panic when they see a stock price approaching their strike price and I will say that sometimes it's good to just roll down and to adjust the strike price but in many cases it's not When Traders basically Panic this can lead to emotional decision- making like prematurely closing out of position rolling at the wrong time or avoiding future trades altogether out of fear which I think is the worst of all to succeed in selling puts you need to have a clear plan in place for how you'll handle these situations before they happen to you

I cannot emphasize enough guys how important this is this will prevent you from making logical Decisions when emotions are running High emotional trading is the number one destroyer of profitability okay you can learn all my strategies you can even be in my Discord following my trades but if you start panicking and closing trades and not following what I'm doing as an example you're not going to get good results right so uh let's go over an example let's say that you soly put option on a stock that's 50 um at a 50 strike price and the

stock is now Trading at 48 with 2 weeks left to expiration many Traders would feel a rush of anxiety at this point wondering whether they should take action whether they should close the position and they're going to be worried right because they're it's below their strike price however if you're prepare for the scenario and are comfortable owning the stock long term you can approach the situation calmly you might choose to roll the option to a later date wait to See if the stock uh recovers or even allow yourself to be assigned the shares knowing that

you're buying a high quality company at a discount and I prefer the ladder which is just buying it at a high you know a high quality company there's really not a problem in 99% of the cases right unless something has fundamentally changed about the company having confidence in the stock you're selling puts on is the easiest way to get rid of emotional stress if You're selling puts on companies you believe you're comfortable owning essentially and you believe in them becomes so easy it's just easy money so easy even if there's some short-term volatility that comes

in you're like yeah I don't mind so you can take a more objective approach knowing that the stock is likely to recover I mean if you're trading Apple and apple falls down 10% you'd be kind of out of your mind to say oh Apple's going to go Bankrupt I mean it's not right it's going to be it's going to be fine so when you're in high quality companies you don't really have to worry about that now another psychological hurdle is is greed be honest with you we're all greedy I'm greedy you're greedy everyone's greedy it's

fine it's normal human emotion right when selling options or selling put options you could be tempting to chase higher premiums by selling puts on riskier more volatile Stocks are choosing strike prices that are closer to the current stock price while this might increase your shortterm income it also significantly raises your risk traders who give into the greed often find themselves assigned shares they don't want or facing large losses because they took on too much risk to combat greed it's important to stay disciplined and stick to your strategy this means focusing on selling puts on higher

quality companies and stocks with Strike prices that provide a margin of safety it's better to consistently collect smaller safer premiums than to take unnecessary risk for chances at a higher payout because typically when you try to take shortcuts in life they typically you know you get what I'm saying some shortcuts are worth it and some are not so take calculated risk I can't say shortcuts in general are bad when you try to chase premiums that ends up being bad you already saw my take on Chasing so look patience is another key psychological trait that you'll

need to cultivate selling put options is not a get-rich quick scheme it's a methodical steady approach to generating income over time some months will be better some months will be a little bit lower but in most months you will be able to beat the S&P 500 especially on a risk adjusted basis and there will be times when you don't collect as much premium as you'd like or when the stock price Doesn't move in your favor but over the long term sticking to a disciplined strategy will produce consistent results it's also important to manage your expectations

you might not hit your income Target every month and that's okay some months you'll collect more premium than others and sometimes you'll need to roll your positions to avoid assignment if you focus too much on short-term results you'll be more likely to make impos of decisions that could Hurt your portfolio one way to maintain your emotional discipline is by setting clear rules for your trades for example you might decide that you will always sell puts on stocks that meet certain fundamental criteria such as your minimum market cap positive earnings and a strong balance sheet you

only sell puts with these strike prices that are at least 5% below the current stock price well by setting these rules in advance you can remove some of the Emotions from your trading decisions so when things don't go your way say hey I did you know these four factors I've invested 5% below you know I'm being a little bit emotional here and you can call yourself out which is really really important so look another way to manage the psychological aspect of put selling is to focus on the process and not just the outcome okay in

other words instead of worrying about whether a single trade will be profitable concentrate whether You're following your system in making good decisions based on your strategy if you consistently follow a wellth thought out process the results will take care of themselves over time finally let's talk about the importance of Detachment when it comes to managing risk and making decisions Detachment means viewing each trade objectively without becoming too emotionally attached to the outcome okay this is very important across many things in life Detachment is Important this can be difficult for some Traders especially if they've been

invested a long time or they put a lot of money into a position which is why I always say risk management is important because if if your risk Management's off it actually makes your investment bigger which affects your emotions so it's all tied right so maintaining a sense of Detachment allows you to move and make more rational moves with more data driven decisions so when you can detach And look at it objectively that's very important so for example if a trade isn't working out as planned it's important to be willing to cut your losses or

Ru the position without feeling like you failed because listen it's not failure you're in this game long term it's okay if you have one losing trade or two losing trades it's not a big deal every Trader experiences losses from time to time what separates successful Traders from unsuccessful Ones is the ability to manage those losses and move on without letting emotions Cloud their judgment now let's shift gears a little bit and discuss how selling put options can be a powerful tool for Building Wealth over time many people are attracted to selling puts because of the

immediate income that they generate because when you do sell a put the cash enters your account immediately your cash balance goes up your account balance won't go up because You have a negative position but you do have extra cash now and you can actually withdraw that cash if you want to uh but the real potential of the strategy lies in its ability to compound your returns over a long period of time so as we've discussed each time you sell a put option you collect a premium up front this premium is yours to keep regardless of

whether the option is exercise or it is an exercise it's already in your account so over time consistent uh Collecting premiums can add up to significant amounts of income like really significant but what's even more powerful is reinvesting that income back into your portfolio to generate even more income in the future so I personally reinvest a lot of my earnings and that's why my portfolio keeps growing and then I use my my coaching income to live off of even though my expens are not that high so both my portfolio and coaching income are above That

but hey that's neither here nor there I just want to point out that at a certain point you're going to get to having enough income where you're so comfortable you're not really going to think about your expenses option trading is really one of those things where the income really starts to stack up especially in your later stages of your career of option trading it's not that it's a career by the way it only takes an hour a week right in my Discord Sessions I have 45 minutes two times a week and that's it it's an

hour and a half a week and not even that just some people just copy the trades without even getting on the call right so what I mean is like the career of you doing this it it eventually snowballs cuz compound interest it snowballs and you get to a point where you'll make so much income well above what your spending needs are and at that point money just becomes like Monopoly money doesn't really Matter that much so anyways let me get back to the point let's say that you start with $50,000 portfolio and you sell a

put option on a stock with strike price that's 5% below your current market price okay so you collect an average premium of you know 2% per month in this example let's say so $1,000 all right we're going to keep it very conservative okay so you make $1,000 on your $50,000 after one month you have $51,000 in your account if you continue To reinvest that income by selling more puts your premium income will grow because now 2% another month will be 2% on 51,000 so you'll make a,2 $20 CU now you make 2% on 1,000 extra

right so it's ,20 right but now you have $52,000 and20 and now you have 2% return I mean 2% return now on $552,000 120 getting a little stretch here we're getting late in the course um that's money that's that's now going to be uh $1,044 or something like that it Compounds it compounds and compounds and compounds it might not seem like a lot but here's a picture of what a compound chart looks like I know you guys have seen this chart before compounding is Big it's big it's like it's like the biceps over the triceps

all right sorry if I'm flexing or whatever I'm just trying to have a good time here and make this course fun all right hitting that a little bit energy Spike right here in the M middle of the course all right so Look after one year you'll have collected a lot of money if you're selling puts over and over and over on a monthly basis and I just realized then it's 1,20 etc etc etc so if you do a linear amount of money right if you think about how much you're making per month it's $1,000 it's

going to be more and more and more and more every single month so you don't make $122,000 a first year with 2% per month you end up making like do do the math here I'm going to Put up on the screen cuz like you you can't do compound interest in your head by the way I have a rough picture of it but it's going to be well over 12,000 it's going to be around 15,000 here it is on the screen so if you're following this the first year you make this amount right in the second

year you make this amount this is without adding money by the way the second year the third year you make this amount and the fourth year it goes up right fifth year here now Check it out I'm going to skip a little bit you might be thinking to yourself okay what if we go into year 10 how much will it be well in five years we've made this in 10 years we've made this and if I do another 5 years and 15 years we have made this you can see how compounding becomes really big and

nonlinear okay so I want you to be aware that sticking to the longterm here and by the way it took me 10 years to get one portfolio to $3.6 million and then The other portfolio is probably around the same it's a long-term portfolio I do use a little bit riskier strategies so I have grown a little bit faster with a little bit more risk but um approaching eight figures here in 10 years guys it's possible for anyone to do it I know it might seem Out Of Reach a little bit especially if you're like newer

in your journey but I'm telling you this is the best investment of time and money that you can possibly make it's the most Passive selling puts is the safest and the most passive way to make money so I just want to say that the compounding effect is one of the most powerful aspects of selling put options just like reinvesting dividends or capital gains or just buying more rental properties and just more more property more and more property it becomes juicy and like I said it becomes like Monopoly money at a certain point um you start

you stop thinking about money completely once you Hit the seven figure Mark I've seen videos on YouTube that will say wealth Skyrock is at 100,000 and it is really true once you hit 100K hit skyrockets from there because now you have money making money okay one of the most powerful things having money is one of the strongest forms of Leverage it creates a snowball effect that can significantly increase your overall wealth year over year becomes easier so if you don't have $300,000 right now That's okay you'll get there when you have $300,000 when you make

2% a month income it's $6,000 you reinvest that it snowballs really fast I have a lot of retirees or folks that are close to retirement I have a dentist he's 47 years in practice right well I won't for security I won't mention his name but he's been practice for 47 years and every single year his portfolio snowballing you know $2.8 million you get up you get like a 20% return that's Half a mil half a mil becomes a lot in fact look I think that anyone can scale it I truly believe that all right and

the fact is selling puts can be especially effective when combined with other wealth building strategies such as dividend reinvestment dollar cost averaging by layering these strategies together you create multiple streams of income within your portfolio all of which contribute to your long-term wealth building goals so for example Let's say that you're selling puts on dividend paying stocks okay if you're assigned the shares you're not only going to collect the dividend payment but you also have the opportunity to sell covered calls on those shares right that's what I call the double dividend strategy and I should

make a video on doing the wheel strategy on the double dividend strategy the double dividend strategy is actually something that I made up I'm not aware of anyone else That has talked about that strategy but the double dividend strategy is pretty simple you pick a dividend stock you do covered calls on it and you can count it as two dividends cuz you have the covered call income and then you have the dividend income now I will say when you sell puts you don't collect dividends because you don't have the position yet so you can't collect

dividends and that's actually why it's not bad to get assigned on puts because Then you have the shares and the shares can pay dividends so the combination of dividend income covered call Premium when you do get assigned the sellp put and just selling puts premium in general this is the most powerful tool for Building Wealth this is how you build wealth fast right so look don't worry if this whole Theory seems a bit overwhelming to you I'm going to go over a ton of real world life examples later on in this course I'm just giving

you All the theory cuz I'm making this course the best course on YouTube I hope that this course makes you subscribe and I hope this course also makes you consider that I'm the best option coach in the world and I'd love to help you if you want help and if this course gave you enough value that you don't need help it's fine as well in my Discord I typically just do trades so folks get to look at what I'm doing they get my personal attention and I do do One-on-one coaching as well so I clean

up portfolios I talk about more advanced topics as well and how to make money especially if you have six figures it's a no-brainer so you can check out the first link in the description but hey subscribing is also enough for me I'm perfectly happy with that too my goal is just to teach and educate make you some money so look let's talk about how this strategy might play out over the next several years for a medium-sized account I want to go over some specific examples and keep in mind this is just a standard example to

give you a ballpark range of how much you can make off of selling puts and if you have a smaller account keep in mind that you could technically make the same amount of money actually even higher amounts of income as a percentage basis lower dollar figure higher percentage by turning these sell puts into a poer spread which I did Cover earlier however it it is a little Bit higher risk as I did mention so look let's say you're my standard student you know 50k 100K let's use 100K let's say you have 100K portfolio and your

selling puts on a diversified mix of high quality stocks you aim to collect an average of uh 2% in premium which amounts to $22,000 after one year you've collected well over 24 ,000 in income and you've grown your portfolio to you know around 125 $130,000 and the second year you can reinvest that premium income by collecting and selling more put options over time this steady income stream by the way just compounds and you get crazy long-term gains one aspect of selling put options that often is overlooked is the importance of tax efficiency when it comes

to selling puts if you're looking for an accountant by the way or a Tax Advisor I am not one but I can connect you to mine so you can email me in the Description I will leave you my email I mean I'm fine to connect you with them I don't really mind I'll just send you as contact and you guys can work together on the tax strategy but I will go over some general Tax Strategies that I do want to cover when it comes to selling puts you know there's not a whole lot of tax

advantages unless you're doing long-term selling puts over one year which would qualify you for the long-term capital gain tax otherwise I Do get questions about creating llc's for option trading which I think in most cases not worth it but it is possible so if you want to send an email I could potentially just connect you but in terms of tax charge is a little bit more favorable on covered calls because you can hold long-term covered calls and the stock appreciation there are some situations where you don't have to pay taxes but when it comes to

selling puts for the most part it's short-term Capital gains so look now let's talk about generating consistent income from selling put options which is obviously incredibly rewarding I think that's pretty clear it's also crucial to understand that managing your tax liability is really important so although most of the time it is short-term capital gains the more cash we can hold on to the better so one strategy I do have is I do sell a lot of my losses at the end of the year to Capture in that tax loss for that year and then I

buy back a similar position it's a little bit more advanced so I mean I can cover that more in my one-on-one coaching I just want to bring these things up so you're aware that you can there are certain strategies that you can use to save on taxes another important consideration is the wash sale rule which can affect your ability to take advantage of tax loss harvesting when trading options the warell rule Prevents you from claiming a loss on a security if you buy the same security or an option to buy the same security within a

30-day period before or after selling it at a loss so this rule applies to option trading so if you're selling puts that are assigned shares you end up losing money on the shares and I pay my taxes I pay a lot of taxes just to be safe with the IRS don't touch that stock for like 30 days otherwise you you can touch it but it's going to Potentially be a wash sale rule and that's because the IRS doesn't want you just selling a bunch of stock you get a loss and then you Reby back the

stock it makes no sense cuz you just bought back the same thing that you lost money on there is a little bit of a loophole and a trick by buying similar stocks but I mean it can be a case-by case basis right obviously I'm not an expert but you want to be careful with the watch sell rule because the watch sell rule it Can cost you a lot of money if you're buying back similar Securities and the IRS says hey this is a similar security you're not going to be able to write that off as

a tax loss Harvest it's not going to count okay so you want to be aware that the warell rule is basically a 30 period where if you do get a sign on a sell put and let's say you don't like the stock which I don't know why you would sell a put and you don't like the stock to begin with so you shouldn't Even have this problem the way I teach it but let's say that you sell the stock right you should not sell another put because then if you sell another put you have a

very similar position and that's going to be disallowed it's going to be disallowed for tax purposes so if you experience a loss and you sell another put it's not going to count as a loss if you have a loss you want it to count as a loss because then it helps your tax efficiency it helps you reduce your tax Burden the lower your tax burden the better right you want to legally reduce your taxes to the lowest amount possible and now that I've covered tax efficiency let's dive deeper into the role of volatility and selling

put options you guys want to make money I think volatility is really exciting so look with volatility can come assignment in managing the stock or managing the position better because with volatility it may hit your uh strike price which May sound scary but listen you don't want to actually react to volatility when you sell a put option one of the two things will happen either the option will expire worthless you'll keep the premium without any further obligation or the option will be exercised if if the volatility is high it goes into the money it will

get exercise on the last day let's talk about early assignment because it is possible for you to have early assignment and I know that's a Very scary thing a lot of my students are afraid of early assignment let me explain one thing first although I don't purposely try to get assigned I actually get excited when it happens because I know that I'm getting a high quality company at a good price however it's still important to be prepared for this scenario and have a plan in place for managing the stock position look early assignment is rare

why is it rare let me show you an example so I just want to Point out that early assignment is really really rare So as you can see here I have a 132 put on Nvidia and Nvidia is like you know a little bit under 132 somewhere thereabouts in the market but I just want to show you an example of even something different where it's really really in the money where it still doesn't make any sense to exercise so if I go for an option that's like say January 17 and I go for a one

you know let's say that you hold a 140 This would not make any sense for early assignment to happen because let's say that you know you sold a put option why would someone exercise and put shares to you you sold a put option why would you get a sign when the Stock's at 132 the premium is 1365 so why would someone exercise because the 140 put if they exercise they would make about $8 right cuz the Stock's at $1 132 it's $8 in the money so why would you want to make $8 of the stock

being $8 in the Money if you sold it you know you have 140 stocks at 132 it's $8 deep so if someone were to exercise you know know they would put you the shares at 140 and the stocks worth you know 132 so they they made $8 but why would they do that why would they make $8 when they can just sell the option for 1365 and this is true up until like basically the last day which is why early assignment happens like almost never the only time early assignment like happens is if the Stock

just like crashed and the Delta is like 80 85 it's like really really high if it's really high then yes maybe you'll get a sign if there's not that many days left but even if it's an 80 delt and there's like a month left still no one's going to exercise because there's more premium on the option itself to just sell the option or buy the option like just trading the option itself is going to be better for that person up until like the last few days So you never have to worry about early assignment it

almost never happens unless the stock is deep deep in the money like super deep 80 Delta and there's like 2 three 4 days left then sure your chances do increase look if you're assigned shares the first step is to eval valuate whether you want to hold on to the stock or if you want to sell it if the stock has dropped below your strike price you might be sitting on a paper loss but that doesn't necessarily Mean that you should sell it if you believe the company looks strong in the long term and the stock

is undervalued holding on to the shares is not a bad play at all at the end of the day you don't technically realize any losses until you sell the stock for a loss in fact being assigned shares at a lower price can be an opportunity to dollar cost average into a long-term position I actually use selling puts as a stock stock entry strategy by purchasing the Stock at a lower price you reduce your overall cost basis which can improve your returns if the stock rebounds if you have the capital for it you can keep selling

puts on the stock keep going you got a sign keep selling puts keep lowering your average cost with premium coming to you if you get ass signed again so what you just lowered your price again you can keep selling puts over and over again as long as it doesn't go above your threshold of your Capital allocation for example if you have 500k you go 10K on a sellp put on paler you do like two or three contracts right paler is around $42 share you go for two or three contracts you get assigned so what do

it again go another 10K another 10K it's fine you have Capital enough to do it here's an example say that you sold the put contract for a stock at 50 per share and you got a $2 premium Now let say that you got to sign the stock at 50 per Share your cost basis is 48 meaning you technically paid 48 per share because you paid 50 but you got $2 in premium okay now let's say you sold an equal amount of put contracts again but this time at $45 for $2 per share all right here

we go so the first time you sold some puts at 50 right you can see here on the screen you sold at 50 you got paid two now you sell an equal amount of say you sold 10 contracts now you sell 10 more contracts at 45 you got to sign Again your average cost is now 10 contracts at 50 and there's 10 contracts at 45 okay that that Center your average cost is now 47.2 okay now mind you if you've collected $ in premium once you collected $2 in premium again okay your average is technically

not even 472 your average is technically cuz you've collected $2 on all 20 contracts you can take off two from 472 now you're at 452 okay so your average cost is a lot lower And you can mix it up let's say that you sold the first contracts at 50 right you got to pay $2 cool now let's say that you sold the second contracts at 45 let's say you only got $1 for it I don't know why that would happen but say you only got $1 for it that's fine your average cost is 47 1/2

and now two and one the average is 1 and 1/2 so 47 1/2 minus 1 1/2 you got 46 your average cost is still going down every time you sell puts your average cost goes down sell More puts I'm always selling puts so assuming that you sold an equal amount of contracts for both times and you collected $2 in premium both times you've reduced your average cost by $2 in theory you can get your average cost down to zero if you sell a 45 put you don't get assigned what do you do sell it again

don't get assigned sell it again if you do that in theory 20 times in a row you've collected $40 if it's $2 each time all of a sudden you've Collected $40 and you get a sign that 45 your average cost is five so it's pretty crazy that means that you keep collecting premium over and over again and every time you collect premium you'll be lowering your cost bases and eventually when you get a sign your cost basis is so low you're going to be in the green no matter what you're just rolling in the dough

of Premium all right so I mean that's a really good position to be in I would say that That's kind of the goal the goal is fine either way you get a sign it's fine you get premium over and over again that's also probably preferred but either way I'm putting you in a position to make income consistently so let's talk about a rare situation where you might just sell and take a loss okay if the stocks fundamentals have deteriorated or you no longer have confidence in the company it may be best to cut your losses

and sell the shares this is where it's important To have a closer look at your exit strategy in place because before you enter a stock you want to think about where you going to exit it you know it's like your ex-wife you know she came she had an Exit Plan and she left I'm just joking well I'm not I work with a lot of guys that are divorced I hate to see it so I always want to help those guys especially my parents are together but I always want to help I want to help everyone

and I hate to see people in Pain in any area of life right I make jokes but I want to say that hope no one took that joke personally look decide in advance what conditions would lead you to sell the stock okay you always want to have that exit strategy and mind whether it's a certain price level right a change in the company's earnings Outlook or a shift in the broader Market all right you want to pay attention to that guys I mean you you really want to think about your future you want to have

It all planned out okay I know that's not possible like with the example I just made about divorce and stuff things happen in relationships right the same same in the stock market guys you know you come into the position one way and it looks a little different right time could shift your perspective on the stock time could shift the the company's fundamentals time could shift the technicals of the company things change guys that's why the market has Opportunities is because there is changes that happen in the market and you got to plan accordingly for it

and you can't fall into a fallacy and that that leads to losses okay so I want you to stay at the top of your game because this is a long-term race not a Sprint it's a marathon that's what I was looking for hope you appreciate the length of content I'm making here staying focused here cuz I think this is a very important topic but a long-term Marathon not a Sprint all right guys as you know it can take months to build a valuable course like this from the research from the editing to the cost of

editing and I just want to say that if you want to learn options as fast as possible and retire I'd be more than happy to coach you oneon-one and teach you exactly how I trade options show you all my trades and work with you oneon-one so if you're interested in that go ahead and click the first link In the description and thanks so much for watching this entire course