Getting back into this (for about the 5th time now) and really trying to understand the fundamentals. It's really great to have these "evergreen" videos to come back to to refresh my memory and level set my learning. And the best part is being able to take advantage of videos across multiple years. I just hopped to this one (2013) after watching one of Mike's whiteboard videos (2016) about managing small accounts and I FINALLY understand the 1 SD methodology. It only took me 10 years! (Yes, I've been following for that long, maybe longer). I'm slow, but I get it eventually!
@@jriddick1 I think they meant delta of 30 to 32 (since the 1 SD has delta=16 and atm delta=50) (with delta and probability being synonymous), but it's a 10 year old video so they might use different language now compared to then
This came into my feed at just the right time. With my small account that I am trying to grow without losing any money I have been looking at percentages and rates of return. Although ATM is tempting with the return, clearly a bigger POP is better with a small account. But how big? My research showed that the 70% to 80% POP gave me the return I needed to grow the account and the safety of not losing many trades.
@@MacPizza how is that strategy working out for you ? I started doing that about 6 weeks ago and my accounts are up 20 percent . Has it still been profitable ?
@@mlabour8567 Well, I tried to sell puts belonging to growth stocks ... last months growth stocks have been beaten down, so it didn't work .. what type of stocks did you choose to sell puts from?
Selling puts worked well for me. I have a margin account. So I sell naked SPY put at 97 to 99% rate. It's far out otm strike with really high winning rate and low premium. SPY options expires on every Monday, Wednesday, and Friday. On Monday. I sell put option expire on Wednesday for around 10 to 15 dollars. And buy back at 0.01 which is 1 dollar premium. Once I close the Wednesday put option, I immediately sell another put for Friday, collect another 10 to 15 dollar at 97 to 99% winning rate. So it's 30 to 45 per week with about 10k in my account. Annual return is more than 15% with 97% winning rate.
There is no way you have 10k in your account. In order to collect 10 to 15 dollars, you need to go to about 284-286 strike price. Even if you choose standard expiration date, still the farthest you'd go to collect the money you're talking about is a 250 strike. You need to have at least 25k in your account to sell one contract. How do you sell SPY puts with 10k in your account?
@@sergeisavitski7339 he said margin account.. anyone who's used one knows that you don't pay for margin till you get assigned.. so he buys them back before assignment. It's a very good strategy.
This is THE(!) most useful info for all those who are interested in trading options! This is a key to success in options trading. I'm trading markets for over 16 years, I wish I knew it at the very beginning of my career.
I have to do the screenshots and print out all the slides cause they are just so exquisitely precious strategies and guidance. Thank you so much for this precious yet complimentary information.
I have watched this video 4 times and I just jot it!!! Thank you so much!!! Wow As someone new to options, you blew my mind, showing that selling puts at about 35% out of the money in a bull market is a cash cow.
U better be clothed like selling covered call options than selling naked option. only need One BLACK Swan incident to wipe out all your life saving money in your trading account.
@Gude Balm and @Lawrence Hiun, thanks for highlighting this. @Paul Gregory and others, this is because naked writing has limited upside (the differential in premuim that you net) but an unbounded downside (if underlying ends ITM and the contract buyer exercises his right to buy/sell at a discount to the strike price, which you are obligated to honor). With odds in favor of upside, we tend to miss that even a lesser probable contrary movement will have a disproportionately bigger impact, wiping off much of the benefits of the earlier successes or could even get you into a negative territory.
Discovered you guys a few weeks ago and learning much. Thank you for sharing your experience and insight. I believe you are sincere in wanting people to become successful investors, unlike so much of the "investor mentors" out their that seem to make their money selling "instruction seminars", that seems to be the way THEY make money. You give us so much excellent free information that far exceeds what others sell for thousands of dollars. Thank you and I wish you continued success as I am becoming a more successful trader because of what you do.
I'm primarily a put seller. My favorite strategy. Have done it at times on margin (with exit rules in place), and that has improved income generation as well.
@@Bender2497 thanks for replying. when you say high vol, does the direction of the trend/vol matter? like does it make a difference if the stocks going down or up, would you still sell puts as opposed to calls?
@@hunnusunnu6896 The direction doesn't matter. Having high vol simply means that expected range of the stock has increased, in either an up or down direction. I do look at the trend of the stock. If the trend is higher, I'm more likely to sell a put spread. If lower, then a call spread. If the IV is high with no real trend at all, I'll look to sell an Iron Condor and adjust my untested side if I have to. Most stocks options are high implied vol if they are over a specific event, like earnings of the stock, or an expected Fed announcement, for example. Sometimes they are not. I'm currently playing GOOGL and AMZN Dec options with really wide Iron Condors because both have an IV% over 50. Both have earnings in Jan, so a nice set-up with no real "known" market moves from now until expiration.
Trading eventually pays off with the right guide and strategy, most traders are too eager to make quick buck and unable to wait for the right trading setup. Making reasonable profits in the stock market requires great skill and patience.
@@derrickadams8416 yes, people make really great profits, you should understand the fundamentals, I also made lots of mistakes as a beginner few years ago, I lost over $4000 but today my yearly trade earnings is over $480k. with the right skills and expertise you’ll definitely make great profits in the stock market.
Thank you, I have an account with you, and have been scouring your videos. This is the number 1 video that just brought all of my blurry eyed work together. Of course, I can't praise ALL of your videos enough. Really, really. But like Tony said, to just do it, and thanks to you, with full confidence.
Tom and Tony there is so much to learn. Is it so that an out of the money sold put that expires means that you keep the profit from sale. Do you have a book that explains all the ins and outs of the different strategies?
So the takeaway is that ATM put credits have lower BP but allows higher volatility in the portfolio. OTM has lower variance in return for higher BP reduction. If the market during these types of trades follows a gaussian process, they will eventually cancel out after many or diversified trades. I think these type of choices really depends on the account holder. For someone with a small account should follow ATM sell puts to increase the number of occurrences for profit (taking advantage of uptrends) and to manage trades faster. Doing an OTM has a high probability, however, the issue is that one position OTM has a bigger downside risk, which would wipe a small account if it were to be an outlier. I would take advantage of the ATM credit puts because of the fact that BP is smaller and the individual can diversify more positions onto other strategies also taking advantage of the market trends upwards.
Divide the profit by standard deviation and then compare which gives better returns.. it will look almost similar returns with 1 SD put having higher probability
Literally you can sell puts now in today's volatile Coronavirus bear market and make a killing. Only sell puts on solid companies with not a ton of debt and also I only do this with stocks/ETFs that have dividends. When you only have $10k in your account, Have stocks and some other core holdings but also sell puts on low price stocks that are volatile.
I like to sell weekly options concentrating on companies reporting earnings. Only choose companies with proven track records and not the Gopros and Biotechs of the world, and look for high probabilities of success. Hell I may not be banking but the success and returns are much better than a savings account and even a damn 30 year bond.
I wish they would show a rate of return on buying power, instead of just a profit/loss number. This would give me much better insight in which strategy is actually more efficient. Just because the profit number is higher doesnt necessarily mean the rate of return is also higher. Same can be said for most of their other studies.
The strategy is useless. Selling options doesn't give you an edge. During lossing period a sell option contract a single loss can easily take down more than 65% of the total profits made. Now imagine getting just two losses you will already be on red.
@paulnyagini It can, but doesn't have to. If you size properly and adhere to your stop loss, then you have control over the trades maximum effect on your portfolio.
I always come back to the oldies but goodies. If you to want scale your account faster then stick with better Probabilities. Then you can more quickly scale your position sizes at similar risk over time. The compounding can then payoff big.
I agree on small position size plus being further otm on all positions for small accounts and money management but if you know the instrument your trading why not instead of trading 15 small positions trade 3 instead to collect more premium with bigger manageable volumes
Liked the presentation. Liked especially the comments about higher volume, if you can manage it, as Tom (?) is suggesting a statistical approach. So that the process becomes more mechanical than not.
@@dayawaagoons769 IV* sqrt(dte/365). So a monthly option with an iv of 30% can swing 0,3*sqrt(30/365)=0,086=8,6% in both directions within 1sd. Your buying power reduction is usually 2sd, so 17,4% of the stock price times 100 in this example. You can estimate 1sd for monthly options with iv/3,5.
how long we should get them before expiry - as little as possible Were they weeklys that you teased - doesn't matter. Weeklies just end on any expiry other than the 3rd Friday of the month. But to answer your question they were showing you monthlies - 49 instances through 4yrs = 12 x 4 = 48 **he said it was just over 4yrs that's why its 49 not 48
I have a question SPY between 2009-2012 was 70-130 respectively. To make about 5900 over 4 years. Was that 50% ROC? Was it better just buying some good stocks?
I'm really intrigued with selling options on the big leveraged etfs. Taking advantage of decay. Especially the inverse 3x that decay like mad. Does anybody do that?
I do this and it’s been working for years. Open 100 iron condors on SPY $10 OTM in both directions day before expiration and let them expire worthless. If it gets within a dollar of my short strikes I’ll sell and lose very little or break totally even. Sure I put up at least 10k twice a week but for every $100 in collateral I put up it’s anywhere from 20-31$ profit per spread. So a 20-35% ROI twice a week. Most times I’ll open these up I’ll start out down 2k but by the next day I’m up again
Bro that’s interesting! But I would be so worried about assignment if it landed between my strikes. If that happens you’re screwed aren’t you? Because buying 100 calls/puts on SPY is a TON of money. How do you account for this massive risk? Thx
Vinny vidi vici no you only lose the difference between strikes so if SPY is at $313 like right now and you make a iron condor for 306-319 expiring tomorrow you get the $15 profit per 100$ you put in collateral. If you get assigned and it lands in between 306 and 305 you only lose the collateral but keep the credit. If it gets to $1 to my short strikes I’ll sell but usually it’ll happen on day of expiration so time decay will make it so you break even or only lose a little then you get your collateral back. It’s really a good way to make small gains with little risk. I’ll only do this with a 90% chance of profit or above
@@Jeramithehuman thx for the reply. i was under the impression that if you sold an IC or credit spread, and the price expired in between your strikes, then you are going to be assigned. for instance, if you sold the $310 put and bought the $305 put, and SPY expired at $307, then you would have to buy SPY at $307. you're telling me that this isn't the case? i'm not slow i promise haha, but i don't understand how you wouldn't be assigned shares? thx again
Vinny vidi vici in that exact example you would get whatever the credit is you can get filled at so for this example let’s say you got $300 credit for this. Your short put sell would be $310 strike and buy the $305 strike. You have to put up the collateral of $500. It’s the dollar difference between strikes times 100. So in your example you would lose $200. The collateral is your max loss no matter what because what happens is you would then exercise your right to buy those shares at the strike taking a 200$ loss total. This is the exact reason you can’t sell a naked put without also buying one with a lower strike unless you have enough to cover assignment. Some brokerages will let you do this but not robinhood. If the contract expires a penny above $310 you keep the credit then get your collateral back usually around 12am-2am same day of expiration. Always remember you can get out of the trade if you see it going down and get scared. Happened to me last week I got my 5K back was supposed to make $1200 but didn’t want to lose my $3800 so I sold at the credit I received and didn’t make anything. All I had to do was give the $1200 back then I immediately got my 5k collateral back. I’ll only do this if it gets a dollar of where my short strikes are at. It’s extremely profitable and easily the safest way to trade. Anytime you trade look at your personal risk tolerance always look at max loss first then probably of success then profit last. When I make these iron condors instead of a call or put credit spread you can pick up a couple extra bucks because the stick can’t close at 2 strikes in the same day. My strategy is on Tuesday around 3-3:30 I’ll make an iron condor 8-10$ away from where it’s currently at in both directions. Sure I’m not making crazy 1500% lottery ticket type gains but usually I’ll take 600-1500$ twice a week. Don’t be scared just set up one far out of where it’s at on Tuesday expiring Wednesday then Thursday expiring Friday. The credit isn’t crazy big but the risk is really low. It will always look like this my contract will get filled and right away it will say down 50-250$ don’t be afraid time is on your side doing this it’ll close the day at 4pm when you wake up and 9:30 rolls around if it’s exactly where it closed the day before saying you were down $100 it will now say you’re plus $100 because of time decay. The longer the day goes the more and more you will make. If it’s more than $2 away from my short strikes I’ll let it expire worthless and keep all the credit then get back the collateral. I live off of these spreads rarely I will buy a naked call and hope it goes up unless I’m long on the stock or running the wheel strategy but only if I’m long on a super solid bulletproof company. Hopefully this helps I’m more than happy to help man I remember being you starting out everything seems so confusing but people on here have helped me get where I’m at trading and have answered any questions I can’t thank them enough. You should check out this guy on TH-cam his channel is Kamakazi Kash. I was so lost but his video playlist called theta gang strategies makes it all so simple. His community is really helpful too. I don’t mind helping sharing knowledge just giving back the help of what I’ve received.
I am considering trading the wheel (selling puts until I get assigned, then sell covered calls until I lose my shares, repeat, repeat,) of AAPL. What I am wondering is, "will this really be more profitable than just buying AAPL and holding onto it?" Thanks for any feedback. Great video, interesting.
It really depends what the stock actually ends up doing, which we can't know ahead of time. If, hypothetically, you knew that AAPL would move upward $30 in a straight line over the next 2 months, buying calls to leverage your directional exposure would be the best strategy to take advantage of this. Selling OTM or ATM puts is also directionally bullish, but you would be leaving gains on the table if the stock pressed higher quickly. There's an inverse relationship between probability that a trade will succeed and the maximum profit level. Selling options has a much higher success rate, but your potential profit is limited to the price of the option sold, whereas going long shares has a lower probability of profit, but you can capture the full price move. Shares really only give you directional exposure, whereas option strategies can be profitable in the absence of a strong directional move.
I’m not an investment advisor but personally I don’t like selling covered calls because it limits your upside. After reviewing apple’s financial records, I would be very happy to hold apple long term. The ROIC is crazy high. If you have an opportunity to buy an excellent company at a very low price then you’re probably better off long term to just buy the stock and continuously reinvest the dividends if you have done your research and looked at the financial data. I love puts but they are just a tool. You can’t use a hammer when you need a wrench. You have to use the right tool for the job. Just my thoughts/2 cents.
You can look at probabilities over a 4 year period, but if I lose the first trade on a small account by letting it expire, whereby I have to buy the underlying stock, I won't have any capital to make a 2nd trade.
well im not sure how small you account value is, but you could try this on a stock which is less than $30 and risk 3,000 or less. Also, if you dont have enough capital to buy 100 shares of the stock you shouldn't do this in the first place. Furthermore, if you are assigned 100 shares, you could even just hold the shares or sell covered calls on it as well!
Investing is key, the rich invest in assets while the poor invest in liabilities. I rather invest and have my money work for me rather than just save and have it sitting there.
That may be their minimum for trading options, but to get to an approval level to sell naked calls/puts isn't going to happen immediately. I've been trading options for 5 years, I've never had a down year, I always make money, but my broker (E*Trade) won't approve me yet, for Level 4 options (their highest level)... I can't trade naked options
Hi guys! Can selling short term( 1-2 weeks) 1 strike OTM cash secured Puts be rational in today's turbulent conditions safe? Which are the best option indicators to use selling such Puts? Thanks
hi Jose it seem to be easier said that done. depending on the IV of the option, option sellers always want the stock move within a range bound or consolidation zone and take advantage of the time decay
@@lawcch I think that applies with neutral strategies like straddles and calendar. However, verticals and strangles are good in directional markets. Yes all short positions profit from theta decay, but you have specific strategies to use for different market environments.
Because you can lose money if the underlying goes below your strike price. For example if your premium is $1 @ $500 strike price and the underlying down to $498 your P/L would be -1. You paid $500 for a $498 stock that means you lost $2 BUT you still get your $1 premium. So $-2 + $1= $-1P/L
I'm still confooosed. If I'm on Robin Hood and I see the option chain with the market share price do I pick one strike above or below that share price. Because, I think they are saying go with the one above the share price when it comes to selling puts.
They are saying 1 SD ( Standard Deviation ) from the stock price, not 1 strike above or below the share price. You can subscribe to Tasty Trade. They have some really good research and some great videos for learning. They also explain standard deviation very well, along with all the Greeks.
The at-the-money (ATM) puts they are talking about are at the closest strike below the share price. This is a riskier move but more profitable. Essentially they are saying in this video that for smaller account sizes, a 1 SD strike is the way to go. Robinhood may have a tool to calculate this.
I was wondering, Tom mentioned that selling these SPY puts, but didn't mention if they were covered or naked. I am guessing that he means covered since smaller (non PM accounts) won't be able to sell naked puts...
You might not be able to sell a naked put but you might be able to sell a vertical. In it you sell a put and buy a cheaper OTM put to offset the max loss. That way you limit your losses and the account is not affected so much.
I don't understand what they are speaking about when they use all of these percentages. Are they referring to the max percentage profit compared to the collateral required for the trade. Say I am credited $35 for the trade and I have to lock up $100 for the trade. Would that be 35%?
How do you calculate a standard deviation for a stock ? Can you ppz explain with an example or refer me to one of your older videos that explains this concept. TIA
Explain this so look at american airlines current pp is 12.81 now look under the sell put option for 7 days out the maximum strike price you can get is $40 under sell/put. The premium alone for just 1 contract at $40 is over $2,700 and obviously the current price will not travel that far in 1 week so there is very little risk and such a high reward it confuses me why people always pick a strike price so close to the current price. Yes the price could blow up and get that high but if it does it would be such strong momentum you wouldn't have to worry about anything because it would keep going up after you bought it. Plus this trade would only require $4000 in capital in your account. I would never do this with this stock but in general how is this a bad idea seems like they are just giving away premium to me.
@Gemeplay, only if you had bought those Put Options ATM/OTM. Even then, the rise in premium is less than a corresponding fall in underlying (0< delta < -1) and any deeply ITM when exercised (which it'd be), will cause you more harm than good. In such a case, do not short the Put; hold till expiry and net the gains: ( ( (asset value at expiry less the strike price) less the premium) times the lot size).
nope...they don't need need it to be there...but you may want it be there...when you are learning the strategy...It's called a "cash secured put" which helps folks sleep better ")
I tried selling put option with my $4k cash..... I cannot afford anything. For example selling just 1 aapl put needs at least $20k cash. AAPL was at $200 earlier this month. I wanted to sell puts. but not enough cash. The only thing I can afford is longing calls or puts, but many website say straight up longing a call or put is way too risky. And suggest we should do a vertical spreads. But shorting a call or put require so much cash? I'm really confused
Here is a segment on a short put vertical spread, which is a way to get into higher priced stocks in a smaller way: www.google.com/url?client=internal-uds-cse&cx=015477303216471237373:u_cnlyqjhzi&q=www.tastytrade.com/tt/shows/mike-and-his-whiteboard/episodes/trade-checklist-vertical-put-credit-spread-04-12-2016&sa=U&ved=2ahUKEwiT8-a3-JHkAhVDC6wKHRjLC8UQFjAAegQIARAC&usg=AOvVaw3Zca-NuqFxfH05lKG6dNvo Spreads have a higher chance of reaching max loss compared to a short put, so be aware of that.
Great question! Really the answer is risk tolerance & goal of the trade - if the goal is to take the shares at a low cost basis, the 30 delta put will achieve this in a more efficient way than the ATM, even though the ATM can have a higher P/L over time. BPR could also be higher ATM than further OTM, so that could be a consideration too. Totally up to you though!
What do they mean by " We have shown that managing winners and selling premium when IV percentile is above 50% can vastly improve ROC and Probability of success " @ 08:36 Are they saying only sell when the Implied Vol> %50 ?
I have been trading for over 10 years in options and not one of my accounts even have permission to sell puts. Most of my accounts are smaller and they never get approved for the higher options levels that would be allowed to sell a put.
Hi , thanks for the great video. What happens if I don't close my put Option Through the Expiration Date? My short Put strike price is 760 and the stock price is 930. In my profile, it shows a negative profit now and the expiration date is 17June.
In this case, you will keep the all the premium. The market stock price is higher than strike price so that the option will expire worthless. Please be careful when you sell put options. Please make sure you have enough cash to cover your self at the strike price if you are obligated to buy it. I always pick good companies like Bank of America and calculate the intrinsic value. If the stock is undervalued, I write put options. It is a good way to make a profit.
I could be wrong but what I'm hearing is that if the price doesn't go below the strike price you should be fine. Which means, why would you not sell puts very very far out of the money that is highly improbable to hit and have nearly a 100% chance of making a small profit every time? If a stock is at $10 and i seen $1 puts that expire in a week, as long as nothing disastrous happens it seems like that is almost guaranteed money.
You are talking about a different type of options trading. The put he is talking about has a max potential loss of what ever you spend on the premium to buy it and an infinite potential gain.
@@jacobdavid it's 84% probability of profit, not 84% OTM. I don't know how to manually calculate standard deviations for options, but if you don't have access to a broker that shows you, it seems that looking for options with a .3 delta is a good rule of thumb.
Everytime I see these guys in my feed and read the title. I am like hell yeah, I got something to watch. Then I remember how they con us with Super trader Karen. Then I get sick in my stomach.
Options are not traded on margin - you get margin relief by way of a smaller buying power reduction than cash secured, but you need to have the cash available to trade options up front.
So in TD ameritrade it will not let me sell puts because of buying power... any way around this? i dont understand why it allows a more risky strategy of buying a straddle but wont let me create an iron condor?? please answer thanks
+Billy Jean You can hedge by buying a long put at a lower strike than your short put and collect the difference. If you first long the put it will allow you to short, provided that your maximum possible loss does not exceed your margin requirements
Getting back into this (for about the 5th time now) and really trying to understand the fundamentals. It's really great to have these "evergreen" videos to come back to to refresh my memory and level set my learning. And the best part is being able to take advantage of videos across multiple years. I just hopped to this one (2013) after watching one of Mike's whiteboard videos (2016) about managing small accounts and I FINALLY understand the 1 SD methodology. It only took me 10 years! (Yes, I've been following for that long, maybe longer). I'm slow, but I get it eventually!
We're actually working on releasing weekly options concepts guides starting next Sunday, so keep an eye out for those as you start your journey!
Yeah I’ve also been a slow learner after a few years. I think it’s sinking in.
@tastylive what did he mean 2:20 when he said we stick around that 30-35% level?
@@jriddick1 I think they meant delta of 30 to 32 (since the 1 SD has delta=16 and atm delta=50) (with delta and probability being synonymous), but it's a 10 year old video so they might use different language now compared to then
This came into my feed at just the right time. With my small account that I am trying to grow without losing any money I have been looking at percentages and rates of return. Although ATM is tempting with the return, clearly a bigger POP is better with a small account. But how big? My research showed that the 70% to 80% POP gave me the return I needed to grow the account and the safety of not losing many trades.
What was your strategy? Selling naked options? Spreads?
@@MacPizza Vertical spreads with 80% or better probability 1 to 2 weeks until expire.
@Thomas Cook care to elaborate? Or offer an adjustment to make it better?
@@MacPizza how is that strategy working out for you ? I started doing that about 6 weeks ago and my accounts are up 20 percent . Has it still been profitable ?
@@mlabour8567 Well, I tried to sell puts belonging to growth stocks ... last months growth stocks have been beaten down, so it didn't work .. what type of stocks did you choose to sell puts from?
Selling puts worked well for me. I have a margin account. So I sell naked SPY put at 97 to 99% rate. It's far out otm strike with really high winning rate and low premium. SPY options expires on every Monday, Wednesday, and Friday. On Monday. I sell put option expire on Wednesday for around 10 to 15 dollars. And buy back at 0.01 which is 1 dollar premium. Once I close the Wednesday put option, I immediately sell another put for Friday, collect another 10 to 15 dollar at 97 to 99% winning rate. So it's 30 to 45 per week with about 10k in my account. Annual return is more than 15% with 97% winning rate.
What are you paying in commissions? Doubt you are truly seeing 15% a year after you factor in commissions and taxes.
There is no way you have 10k in your account. In order to collect 10 to 15 dollars, you need to go to about 284-286 strike price. Even if you choose standard expiration date, still the farthest you'd go to collect the money you're talking about is a 250 strike. You need to have at least 25k in your account to sell one contract. How do you sell SPY puts with 10k in your account?
@@sergeisavitski7339 he said margin account.. anyone who's used one knows that you don't pay for margin till you get assigned.. so he buys them back before assignment. It's a very good strategy.
@@brucea550 Robinhood is almost free.
It’s also a shitty platform if you’re a trader. Good for learning, not trading for a living.
This is THE(!) most useful info for all those who are interested in trading options! This is a key to success in options trading. I'm trading markets for over 16 years, I wish I knew it at the very beginning of my career.
I have to do the screenshots and print out all the slides cause they are just so exquisitely precious strategies and guidance. Thank you so much for this precious yet complimentary information.
I have watched this video 4 times and I just jot it!!! Thank you so much!!! Wow As someone new to options, you blew my mind, showing that selling puts at about 35% out of the money in a bull market is a cash cow.
***** I'm almost always naked, but my trades aren't ;).
U better be clothed like selling covered call options than selling naked option. only need One BLACK Swan incident to wipe out all your life saving money in your trading account.
@Gude Balm and @Lawrence Hiun, thanks for highlighting this.
@Paul Gregory and others, this is because naked writing has limited upside (the differential in premuim that you net) but an unbounded downside (if underlying ends ITM and the contract buyer exercises his right to buy/sell at a discount to the strike price, which you are obligated to honor).
With odds in favor of upside, we tend to miss that even a lesser probable contrary movement will have a disproportionately bigger impact, wiping off much of the benefits of the earlier successes or could even get you into a negative territory.
Lawrence Hiun thank
Discovered you guys a few weeks ago and learning much. Thank you for sharing your experience and insight. I believe you are sincere in wanting people to become successful investors, unlike so much of the "investor mentors" out their that seem to make their money selling "instruction seminars", that seems to be the way THEY make money. You give us so much excellent free information that far exceeds what others sell for thousands of dollars. Thank you and I wish you continued success as I am becoming a more successful trader because of what you do.
I'm primarily a put seller. My favorite strategy. Have done it at times on margin (with exit rules in place), and that has improved income generation as well.
Bender2497 hello bender would you teach me how to trade put options!?
Really? Did it really improve?
@@hunnusunnu6896 Yes, in a high volatility market, you can move out your short strikes further. It's easy money.
@@Bender2497 thanks for replying. when you say high vol, does the direction of the trend/vol matter? like does it make a difference if the stocks going down or up, would you still sell puts as opposed to calls?
@@hunnusunnu6896 The direction doesn't matter. Having high vol simply means that expected range of the stock has increased, in either an up or down direction. I do look at the trend of the stock. If the trend is higher, I'm more likely to sell a put spread. If lower, then a call spread. If the IV is high with no real trend at all, I'll look to sell an Iron Condor and adjust my untested side if I have to. Most stocks options are high implied vol if they are over a specific event, like earnings of the stock, or an expected Fed announcement, for example. Sometimes they are not. I'm currently playing GOOGL and AMZN Dec options with really wide Iron Condors because both have an IV% over 50. Both have earnings in Jan, so a nice set-up with no real "known" market moves from now until expiration.
Trading eventually pays off with the right guide and strategy, most traders are too eager to make quick buck and unable to wait for the right trading setup. Making reasonable profits in the stock market requires great skill and patience.
I’ve been trying to get the right trading setup, The stock market is tricky I’ve made more losses than profits. Do people really make good profits?!!
Setting realistic goals is an essential part of keeping trading in perspective.
@@derrickadams8416 yes, people make really great profits, you should understand the fundamentals, I also made lots of mistakes as a beginner few years ago, I lost over $4000 but today my yearly trade earnings is over $480k. with the right skills and expertise you’ll definitely make great profits in the stock market.
@@emiliobarretto9732 Beginners needs to understand reasonable return should be earned in a reasonable amount of time.
@@liamjohn2756 wow.. the master tuning for such successful trades requires great skills and expertise. How did you do it??
People could pay thousands of dollars for this information and we have it for free.
Worst part is that it probably isn’t even near this level of quality
Well, has anyone actually started a "career" by selling puts in a 5,000 account? That's cutting to the chase.
As a single parent I appreciate free.
Come on men selling options doesn't give you an edge over other players. This is just a vugazi info.
Thank you, I have an account with you, and have been scouring your videos. This is the number 1 video that just brought all of my blurry eyed work together. Of course, I can't praise ALL of your videos enough. Really, really. But like Tony said, to just do it, and thanks to you, with full confidence.
These guys are so awesome... lots of info for a green options trader. "Picking up nickles in front of a steam roller". lol
The stats you present are correct in a bull market scenario...but flawed in a down market
Tom and Tony there is so much to learn. Is it so that an out of the money sold put that expires means that you keep the profit from sale. Do you have a book that explains all the ins and outs of the different strategies?
I didn't know that Sam Kinison traded stocks
Yeah right, lol
Or was even alive!
🤣🤣🤣
it would be wicked funny to edit him into the video
Brother from another Mother... 😂
So the takeaway is that ATM put credits have lower BP but allows higher volatility in the portfolio. OTM has lower variance in return for higher BP reduction. If the market during these types of trades follows a gaussian process, they will eventually cancel out after many or diversified trades. I think these type of choices really depends on the account holder. For someone with a small account should follow ATM sell puts to increase the number of occurrences for profit (taking advantage of uptrends) and to manage trades faster. Doing an OTM has a high probability, however, the issue is that one position OTM has a bigger downside risk, which would wipe a small account if it were to be an outlier. I would take advantage of the ATM credit puts because of the fact that BP is smaller and the individual can diversify more positions onto other strategies also taking advantage of the market trends upwards.
you guys are AWESOME
Divide the profit by standard deviation and then compare which gives better returns.. it will look almost similar returns with 1 SD put having higher probability
Still watching and learning been 10yrs 🎉
Literally you can sell puts now in today's volatile Coronavirus bear market and make a killing. Only sell puts on solid companies with not a ton of debt and also I only do this with stocks/ETFs that have dividends. When you only have $10k in your account, Have stocks and some other core holdings but also sell puts on low price stocks that are volatile.
Let's see if my $8 on CCL survives tomorrow's expiration :)
Well, has anyone actually started a "career" by selling puts in a 5,000 account? That's cutting to the chase.
I like to sell weekly options concentrating on companies reporting earnings. Only choose companies with proven track records and not the Gopros and Biotechs of the world, and look for high probabilities of success. Hell I may not be banking but the success and returns are much better than a savings account and even a damn 30 year bond.
Jagroop Dhillon would you teach me how
To trade puts options? Let me know
Well, has anyone actually started a "career" by selling puts in a 5,000 account? That's cutting to the chase.
This stuff is mind blowing amazing. Love these dudes. And free !
Hitting a lot of singles, instead of rare home runs - to use a baseball analogy
And taking walks. :) Moneyball.
This is all great and what results would there have been with an exit at 50% of credit received (if that price touched) instead of waiting for expiry?
I wish they would show a rate of return on buying power, instead of just a profit/loss number. This would give me much better insight in which strategy is actually more efficient. Just because the profit number is higher doesnt necessarily mean the rate of return is also higher. Same can be said for most of their other studies.
The strategy is useless. Selling options doesn't give you an edge. During lossing period a sell option contract a single loss can easily take down more than 65% of the total profits made. Now imagine getting just two losses you will already be on red.
@paulnyagini It can, but doesn't have to. If you size properly and adhere to your stop loss, then you have control over the trades maximum effect on your portfolio.
I always come back to the oldies but goodies. If you to want scale your account faster then stick with better Probabilities. Then you can more quickly scale your position sizes at similar risk over time. The compounding can then payoff big.
I agree on small position size plus being further otm on all positions for small accounts and money management but if you know the instrument your trading why not instead of trading 15 small positions trade 3 instead to collect more premium with bigger manageable volumes
Tell that to Tesla. I been up and down on that ride.
Liked the presentation. Liked especially the comments about higher volume, if you can manage it, as Tom (?) is suggesting a statistical approach. So that the process becomes more mechanical than not.
Thanks guys. What is the meaning of “30-35%”? Thanks
30-35% Delta
That's a great argument at 0:40 sir, but may I know what is your source? May I ask for sources for all your claims actually
Interesting comparison. Great takeaways! Stay 1SD away for better managed winners!
How do you determine/calculate 1SD of a stock?
@@dayawaagoons769 IV* sqrt(dte/365). So a monthly option with an iv of 30% can swing 0,3*sqrt(30/365)=0,086=8,6% in both directions within 1sd. Your buying power reduction is usually 2sd, so 17,4% of the stock price times 100 in this example. You can estimate 1sd for monthly options with iv/3,5.
@@Psi-Storm thank you so much
Brand New TastyTrade account holder..... WOW !
You guys are awesome, through your channel I came to know about Option Strategy, which opened door for me in share market or Trading..
Love your content. Just opened an account with Tasty. Can't wait to start trading with you.
I'm new. Selling putz n incorporating it into Wheel strategy is the only way to go.
Quick question, these puts - how long we should get them before expiry? Were they weeklys that you tesed? Thx
how long we should get them before expiry - as little as possible
Were they weeklys that you teased - doesn't matter. Weeklies just end on any expiry other than the 3rd Friday of the month. But to answer your question they were showing you monthlies - 49 instances through 4yrs = 12 x 4 = 48
**he said it was just over 4yrs that's why its 49 not 48
I have a question SPY between 2009-2012 was 70-130 respectively. To make about 5900 over 4 years. Was that 50% ROC? Was it better just buying some good stocks?
So sell ATM or OTM ? Since ATM provide higher profit which would offset potential loss, wouldn’t it make more sense just selling ATM?
ATM has more risk for taking on intrinsic value. OTM options have less risk of that, and are therefore less labor-intensive trades.
tastytrade what do you normally sell? ATM or OTM?
@@tastyliveshow what about itm? Why does no one talk about that? Would itm have a higher p/L
I'm really intrigued with selling options on the big leveraged etfs. Taking advantage of decay.
Especially the inverse 3x that decay like mad. Does anybody do that?
I do this and it’s been working for years. Open 100 iron condors on SPY $10 OTM in both directions day before expiration and let them expire worthless. If it gets within a dollar of my short strikes I’ll sell and lose very little or break totally even. Sure I put up at least 10k twice a week but for every $100 in collateral I put up it’s anywhere from 20-31$ profit per spread. So a 20-35% ROI twice a week. Most times I’ll open these up I’ll start out down 2k but by the next day I’m up again
Bro that’s interesting!
But I would be so worried about assignment if it landed between my strikes. If that happens you’re screwed aren’t you?
Because buying 100 calls/puts on SPY is a TON of money. How do you account for this massive risk? Thx
Vinny vidi vici no you only lose the difference between strikes so if SPY is at $313 like right now and you make a iron condor for 306-319 expiring tomorrow you get the $15 profit per 100$ you put in collateral. If you get assigned and it lands in between 306 and 305 you only lose the collateral but keep the credit. If it gets to $1 to my short strikes I’ll sell but usually it’ll happen on day of expiration so time decay will make it so you break even or only lose a little then you get your collateral back. It’s really a good way to make small gains with little risk. I’ll only do this with a 90% chance of profit or above
@@Jeramithehuman thx for the reply. i was under the impression that if you sold an IC or credit spread, and the price expired in between your strikes, then you are going to be assigned. for instance, if you sold the $310 put and bought the $305 put, and SPY expired at $307, then you would have to buy SPY at $307. you're telling me that this isn't the case? i'm not slow i promise haha, but i don't understand how you wouldn't be assigned shares? thx again
Vinny vidi vici in that exact example you would get whatever the credit is you can get filled at so for this example let’s say you got $300 credit for this. Your short put sell would be $310 strike and buy the $305 strike. You have to put up the collateral of $500. It’s the dollar difference between strikes times 100. So in your example you would lose $200. The collateral is your max loss no matter what because what happens is you would then exercise your right to buy those shares at the strike taking a 200$ loss total. This is the exact reason you can’t sell a naked put without also buying one with a lower strike unless you have enough to cover assignment. Some brokerages will let you do this but not robinhood. If the contract expires a penny above $310 you keep the credit then get your collateral back usually around 12am-2am same day of expiration. Always remember you can get out of the trade if you see it going down and get scared. Happened to me last week I got my 5K back was supposed to make $1200 but didn’t want to lose my $3800 so I sold at the credit I received and didn’t make anything. All I had to do was give the $1200 back then I immediately got my 5k collateral back. I’ll only do this if it gets a dollar of where my short strikes are at. It’s extremely profitable and easily the safest way to trade. Anytime you trade look at your personal risk tolerance always look at max loss first then probably of success then profit last. When I make these iron condors instead of a call or put credit spread you can pick up a couple extra bucks because the stick can’t close at 2 strikes in the same day. My strategy is on Tuesday around 3-3:30 I’ll make an iron condor 8-10$ away from where it’s currently at in both directions. Sure I’m not making crazy 1500% lottery ticket type gains but usually I’ll take 600-1500$ twice a week. Don’t be scared just set up one far out of where it’s at on Tuesday expiring Wednesday then Thursday expiring Friday. The credit isn’t crazy big but the risk is really low. It will always look like this my contract will get filled and right away it will say down 50-250$ don’t be afraid time is on your side doing this it’ll close the day at 4pm when you wake up and 9:30 rolls around if it’s exactly where it closed the day before saying you were down $100 it will now say you’re plus $100 because of time decay. The longer the day goes the more and more you will make. If it’s more than $2 away from my short strikes I’ll let it expire worthless and keep all the credit then get back the collateral. I live off of these spreads rarely I will buy a naked call and hope it goes up unless I’m long on the stock or running the wheel strategy but only if I’m long on a super solid bulletproof company. Hopefully this helps I’m more than happy to help man I remember being you starting out everything seems so confusing but people on here have helped me get where I’m at trading and have answered any questions I can’t thank them enough. You should check out this guy on TH-cam his channel is Kamakazi Kash. I was so lost but his video playlist called theta gang strategies makes it all so simple. His community is really helpful too. I don’t mind helping sharing knowledge just giving back the help of what I’ve received.
Is this weekly exp dates. How many strike prices you buy out of the money ?
Great vid. You answered your own question.. what do you consider a small account?
Under 25k
Good content. Thank you!
Ok it's clear how to manage winners but what if you get assigned? How to deal with that? Should I start selling calls against underlying?
I’m new, how to know calculate the 1 SD way? Use todays price and what a good option would be if I think a good pullback is going to happen soon
Would of like to see how expiration date come into play. What expiration length had the best chance of profit, etc…
Just sell put credit spreads if your account's small
Chace Bonanno he bro. What do you mean? Sounds really smart. No bull
Chace Bonanno what you Bro. I need closing a put spread information
I am considering trading the wheel (selling puts until I get assigned, then sell covered calls until I lose my shares, repeat, repeat,) of AAPL. What I am wondering is, "will this really be more profitable than just buying AAPL and holding onto it?" Thanks for any feedback. Great video, interesting.
Can be... 😂
That is surely a great idea, especially if there is low or no assignment fees and or trading fees for the options
It really depends what the stock actually ends up doing, which we can't know ahead of time. If, hypothetically, you knew that AAPL would move upward $30 in a straight line over the next 2 months, buying calls to leverage your directional exposure would be the best strategy to take advantage of this. Selling OTM or ATM puts is also directionally bullish, but you would be leaving gains on the table if the stock pressed higher quickly.
There's an inverse relationship between probability that a trade will succeed and the maximum profit level. Selling options has a much higher success rate, but your potential profit is limited to the price of the option sold, whereas going long shares has a lower probability of profit, but you can capture the full price move. Shares really only give you directional exposure, whereas option strategies can be profitable in the absence of a strong directional move.
I’m not an investment advisor but personally I don’t like selling covered calls because it limits your upside. After reviewing apple’s financial records, I would be very happy to hold apple long term. The ROIC is crazy high. If you have an opportunity to buy an excellent company at a very low price then you’re probably better off long term to just buy the stock and continuously reinvest the dividends if you have done your research and looked at the financial data. I love puts but they are just a tool. You can’t use a hammer when you need a wrench. You have to use the right tool for the job. Just my thoughts/2 cents.
They need to measure against long and holding. Put writing is very good strategy but when it punish it punish very hard.
it really do be like that sometimes. maybe better to do a buy a put a couple std's lower
@@DevinSmith1486 the method is about selling puts....not buying them
@@youcanknowanything8489 he meant a spread not just buy a PUT
Great info and good explanation
Very impressive.
You can look at probabilities over a 4 year period, but if I lose the first trade on a small account by letting it expire, whereby I have to buy the underlying stock, I won't have any capital to make a 2nd trade.
well im not sure how small you account value is, but you could try this on a stock which is less than $30 and risk 3,000 or less. Also, if you dont have enough capital to buy 100 shares of the stock you shouldn't do this in the first place. Furthermore, if you are assigned 100 shares, you could even just hold the shares or sell covered calls on it as well!
Nice video! Liked and subscribed!! 😎
Awesome video!
Investing is key, the rich invest in assets while the poor invest in liabilities. I rather invest and have my money work for me rather than just save and have it sitting there.
Yeah there’s an opportunity cost to holding cash. Cash the worst performing asset class due to inflation.
@@ChaceBonanno Right now, cash is superior to all other asset classes.
MrGunwitch right now. Have fun trynna time recessions
@@ChaceBonanno On the professional side we do it all the time. You don't need to be exact.
So exactly which broker will let you trade naked options in a SMALL account? Last time checked the requirement was 10,000-$100,000?
+Kiiren100 TD's minimum account size for options is $2,000. That said, $10,000 would be considered a small account, especially for trading options.
selling NAKED option is a game for hedge fund manager only because they have to hedge their portfolio fund in billion dollar investment
Leggo My Ego i understand but that shouldn't prevent retail traders from taking advantage of this lucrative strategy...no wonder its expensive
That may be their minimum for trading options, but to get to an approval level to sell naked calls/puts isn't going to happen immediately. I've been trading options for 5 years, I've never had a down year, I always make money, but my broker (E*Trade) won't approve me yet, for Level 4 options (their highest level)... I can't trade naked options
Why would you not hedge a 10 000 dollar portfolio?
Pardon me, what is the 30% number? What is the significance?
Probability ITM
thanks for the explanation, would be better if you can show any Live Example on broker platform.
How do you show a live example of a three year study? 🤦🏻♂️
What did he mean at 2:20 when he said "we stick around that 30-35% level"? (h/t Jonathan Riddick)
I think 30-35 pct OTM
yes
Hi guys! Can selling short term( 1-2 weeks) 1 strike OTM cash secured Puts be rational in today's turbulent conditions safe? Which are the best option indicators to use selling such Puts?
Thanks
Awesome video! Thank you.What were the days to expiration for each option in the study?
Doesn't matter expiration best probabilty of success if you choose OTM than ATM with one SD put!
hi Jose it seem to be easier said that done. depending on the IV of the option, option sellers always want the stock move within a range bound or consolidation zone and take advantage of the time decay
Lawrence Hiun thats the whole point right?
@@lawcch I think that applies with neutral strategies like straddles and calendar. However, verticals and strangles are good in directional markets. Yes all short positions profit from theta decay, but you have specific strategies to use for different market environments.
But what about when you get assigned stock.
Excellent.
when i sell a put (is my premium locked the moment i open my position)? (why does it show p/l on the side?
Because you can lose money if the underlying goes below your strike price. For example if your premium is $1 @ $500 strike price and the underlying down to $498 your P/L would be -1.
You paid $500 for a $498 stock that means you lost $2 BUT you still get your $1 premium. So $-2 + $1= $-1P/L
Yes your premium is locked and the money is yours to do whatever with.
that was confusing, to me.
totally weird video
And that's why no one will remember your name 😂
I'm still confooosed. If I'm on Robin Hood and I see the option chain with the market share price do I pick one strike above or below that share price. Because, I think they are saying go with the one above the share price when it comes to selling puts.
They are saying 1 SD ( Standard Deviation ) from the stock price, not 1 strike above or below the share price. You can subscribe to Tasty Trade. They have some really good research and some great videos for learning. They also explain standard deviation very well, along with all the Greeks.
The at-the-money (ATM) puts they are talking about are at the closest strike below the share price. This is a riskier move but more profitable. Essentially they are saying in this video that for smaller account sizes, a 1 SD strike is the way to go. Robinhood may have a tool to calculate this.
I was wondering, Tom mentioned that selling these SPY puts, but didn't mention if they were covered or naked. I am guessing that he means covered since smaller (non PM accounts) won't be able to sell naked puts...
I think these are naked. You are able to short puts in a non leveraged account by the way. Your bpr is just a bit bigger.
You might not be able to sell a naked put but you might be able to sell a vertical. In it you sell a put and buy a cheaper OTM put to offset the max loss. That way you limit your losses and the account is not affected so much.
Whats the spread normaly 5pts, 10pts???
thanks
selling puts in smaler accounts then uses SPY as an axample.
Small to these out of touch sleaze balls is $100K.
Yeah, wtf
@@roniw-m4uit’s a liquid product that represents the average
why do you keep blurring the logos?
Analyzing OTM 1SD selling strategy is meaning that, if IV is 19%, sell a 89% OTM put?
IF your gonna sell puts, stick to SPY puts. You dont want to sell puts on something that could go to zero.
You got that right. SPY of 0 means Alien invasion or Zombies :)
lol
nah...the FED would prop it up ....zombies and all
+JoceAdamVids
Maybe with multiple accounts and not being greedy on each. "?"
That's exactly what i do every month. I have no problem owning spy forever. If I am assigned SPY, I will start selling covered calls every month
What expiration dates are we talking about?
I don't understand what they are speaking about when they use all of these percentages. Are they referring to the max percentage profit compared to the collateral required for the trade. Say I am credited $35 for the trade and I have to lock up $100 for the trade. Would that be 35%?
ANYWAY.....I like this video, Thanks
How do you calculate a standard deviation for a stock ? Can you ppz explain with an example or refer me to one of your older videos that explains this concept. TIA
Good question
16 delta is ! STD
@@TheBearsjunkie cheers...never heard that before
@@TheBearsjunkie What's the math on that?
How do you calculate 1sd put strike price?
Look for 84% OTM or 16% ITM, what the video said.
@@jacobdavid thanks. Meaning 1sd price = last*(last*0.16) ?
Explain this so look at american airlines current pp is 12.81 now look under the sell put option for 7 days out the maximum strike price you can get is $40 under sell/put. The premium alone for just 1 contract at $40 is over $2,700 and obviously the current price will not travel that far in 1 week so there is very little risk and such a high reward it confuses me why people always pick a strike price so close to the current price. Yes the price could blow up and get that high but if it does it would be such strong momentum you wouldn't have to worry about anything because it would keep going up after you bought it. Plus this trade would only require $4000 in capital in your account. I would never do this with this stock but in general how is this a bad idea seems like they are just giving away premium to me.
I like how he looks with the hat it fits him gives him a cool savvy look
So if you want to take a bullish position you should sell at the money puts?
Yes but I'd have to feel very strongly that the underlying stock isn't going to drop. Less risky to sell the put a little bit out of the money.
Sell Deeeeep in the money puts something like 0.99 delta and collect that juicy juicy premium
@Gemeplay, only if you had bought those Put Options ATM/OTM. Even then, the rise in premium is less than a corresponding fall in underlying (0< delta < -1) and any deeply ITM when exercised (which it'd be), will cause you more harm than good.
In such a case, do not short the Put; hold till expiry and net the gains: ( ( (asset value at expiry less the strike price) less the premium) times the lot size).
Does this mean itm puts have the highest P/L?
What is ATM? With my broker i can only go above or below the money... so how do you sell an ATM put?
ATM: At The Money.
ATM put is the put strike closer to the actual stock price.
but if you sell a put they are going to want what the value of the share be in your account. correct?
Correct
You can also use wider gap vertical spreads
nope...they don't need need it to be there...but you may want it be there...when you are learning the strategy...It's called a "cash secured put" which helps folks sleep better ")
I tried selling put option with my $4k cash..... I cannot afford anything. For example selling just 1 aapl put needs at least $20k cash. AAPL was at $200 earlier this month. I wanted to sell puts. but not enough cash. The only thing I can afford is longing calls or puts, but many website say straight up longing a call or put is way too risky. And suggest we should do a vertical spreads. But shorting a call or put require so much cash? I'm really confused
Here is a segment on a short put vertical spread, which is a way to get into higher priced stocks in a smaller way:
www.google.com/url?client=internal-uds-cse&cx=015477303216471237373:u_cnlyqjhzi&q=www.tastytrade.com/tt/shows/mike-and-his-whiteboard/episodes/trade-checklist-vertical-put-credit-spread-04-12-2016&sa=U&ved=2ahUKEwiT8-a3-JHkAhVDC6wKHRjLC8UQFjAAegQIARAC&usg=AOvVaw3Zca-NuqFxfH05lKG6dNvo
Spreads have a higher chance of reaching max loss compared to a short put, so be aware of that.
Can someone explain it to me. If the PL is bigger for the ATM put. Why not just sell ATM puts instead of 30 delta puts?
Great question!
Really the answer is risk tolerance & goal of the trade - if the goal is to take the shares at a low cost basis, the 30 delta put will achieve this in a more efficient way than the ATM, even though the ATM can have a higher P/L over time.
BPR could also be higher ATM than further OTM, so that could be a consideration too.
Totally up to you though!
@@tastyliveshow does this continue for itm? Would itm be higher risk but higher P/L?
What do they mean by " We have shown that managing winners and selling premium when IV percentile is above 50% can vastly improve ROC and Probability of success " @ 08:36 Are they saying only sell when the Implied Vol> %50 ?
graham kaveman yes, only open a trade when IV Rank is above 50.
WhoSeeMoonNews Of course from what I see these were the returns when IV Rank was not put into the pictures because they have 4 years of date..
"IV percentaile is above 50%" is not the same as "Implied Vol>%50
I have been trading for over 10 years in options and not one of my accounts even have permission to sell puts. Most of my accounts are smaller and they never get approved for the higher options levels that would be allowed to sell a put.
i started trading just a month ago and i got approved for selling uncovered calls and puts ?
Hi , thanks for the great video.
What happens if I don't close my put Option Through the Expiration Date? My short Put strike price is 760 and the stock price is 930. In my profile, it shows a negative profit now and the expiration date is 17June.
Nothing happens, you get to keep the option premium received on selling the put
In this case, you will keep the all the premium. The market stock price is higher than strike price so that the option will expire worthless. Please be careful when you sell put options. Please make sure you have enough cash to cover your self at the strike price if you are obligated to buy it. I always pick good companies like Bank of America and calculate the intrinsic value. If the stock is undervalued, I write put options. It is a good way to make a profit.
@@yilmazkurt8584 how you calculate the Intrinsic value?
Time in the market is better den timing the market.
you are talking selling puts; I have some winners in hand, yet I'm told I should "buy puts"?
I could be wrong but what I'm hearing is that if the price doesn't go below the strike price you should be fine. Which means, why would you not sell puts very very far out of the money that is highly improbable to hit and have nearly a 100% chance of making a small profit every time? If a stock is at $10 and i seen $1 puts that expire in a week, as long as nothing disastrous happens it seems like that is almost guaranteed money.
Because puts very very far otm have no premium.
TheRealNiBi b
You are talking about a different type of options trading. The put he is talking about has a max potential loss of what ever you spend on the premium to buy it and an infinite potential gain.
I think you have short puts confused with long calls, which is what you just described.
I could have used specific examples.
How much is one standard deviation?
The video said roughly 84% OTM.
@@jacobdavid it's 84% probability of profit, not 84% OTM.
I don't know how to manually calculate standard deviations for options, but if you don't have access to a broker that shows you, it seems that looking for options with a .3 delta is a good rule of thumb.
Everytime I see these guys in my feed and read the title. I am like hell yeah, I got something to watch. Then I remember how they con us with Super trader Karen. Then I get sick in my stomach.
Hahahahahaha....the real con is Tom owns tastytrade. He don't care what you trade just trade 👶.
He know darn well most going to lose money.
They always hilight new stars but never bring them back for Updates. I wonder why.
What's Super trader Karen?
GOGY is a strong contender in the fast-growing energy drink market, with a 200% return since the launch.
How do margin fees factor into the amount of profit when selling puts with margin?
Options are not traded on margin - you get margin relief by way of a smaller buying power reduction than cash secured, but you need to have the cash available to trade options up front.
@@tastyliveshow ahhhh ok, thank you! It's all starting to come together! Thanks for your response and content
This is surprising to me😳😳
So in TD ameritrade it will not let me sell puts because of buying power... any way around this? i dont understand why it allows a more risky strategy of buying a straddle but wont let me create an iron condor?? please answer thanks
and yes i am highest level of options qualification..
+Billy Jean Did you find soultion for sell to open puts at Ameritrade?
+Billy Jean You can hedge by buying a long put at a lower strike than your short put and collect the difference. If you first long the put it will allow you to short, provided that your maximum possible loss does not exceed your margin requirements
+Matias-Jalil Caceres-Arar I thought so. thanks.
No there's no way. U need to have the money to cover it. And yea I know there are many strategies but I was looking time val
from a creator standpoint and building the channel, I feel like these videos should really really be remix and recreated!!
So what percentage do you usually exit the trade if it isn't working out?
Totally up to you - we like 2-3x credit received in terms of net loss as an exit point if we're going to do it.
@@tastyliveshow ahh okay thanks for the reply! I usually do mine at 200% credit. Subscribing.
What is our max loss