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Selling Put Options Explained By A Professional Trader | Examples Included!
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- เผยแพร่เมื่อ 27 ก.ย. 2020
- Here is how I make money with options. Selling puts is a fantastic way to make income! Put selling is what Warren Buffett did to grow his wealth.
Selling puts is one of my favorite strategies I will be teaching in my options course. You can get great results selling puts on stocks you like! I made $277 in 10 minutes in this video by selling put options which means I am obligated to buy the stocks for a lower price should they hit my strike price. I make sure to explain selling puts easily and with examples.
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Legal Disclosure: I’m not a financial advisor. The information contained in this video is for entertainment purposes only. Before investing, please consult a licensed professional. Any stock purchases I show on video should not be considered “investment recommendations”. I shall not be held liable for any losses you may incur for investing and trading in the stock market in attempt to mirror what I do. Unless investments are FDIC insured, they may decline in value and/or disappear entirely. Please be careful!
I have been trading for about 6 months now and just about every trade backfires and slaps me in my face. Nearly impossible for me to catch more than a few points . I try to do top down analysis but it doesn't work for me . I say to myself, clearly I'm in the 90% that lose money, so I open a demo account, do my analysis, then take the opposite of what I would normally take and get the same result. I'm starting to feel hopeless, any advice for a struggling trader?
@Ray smith You're correct, I don't lose money every single trade, but my main problem is trying to let my runners run. Very rarely do I catch big moves . Instead they go a few pips in my direction, then go against me if when I try holding them. Also my entries could use a lot of improvement. A mentor would be amazing, but getting one is easier said than done. If it's not too much to ask, do you know any legit ones?
From what you wrote, you're using an outright buy or sell to enter and "trying to catch points" AFTER entry. Think of the mental skills that requires. The patience to wait for the right conditions without bias and well practiced analysis. Calculating the stop, risk, and theoretical reward. Entering with the right amount without mistakes. Overcoming anxiety and fear of the stop being hit. THEN the knowledge and practice of what to look for AFTER the trade starts to progress. Looking at or ignoring minute data prints that give clues as to direction. And of course, the patience to hold through to a target. And then the maturity to either accept a profit and not get upset about leaving money on the table. That's a lot of skills to have correct on every trade. It can be done, but what Henry is describing in the video requires less than 1/3 of those skills. And yes they are skills. He is selling calls (or puts) based on visual analysis, and then TIME is ending the trade for him. His DECISIONS are not ending the trade for him. He himself takes his hands off the wheel after he clicks Sell and enters the trade.
Just buy blue chips,, watch barchart, 52 week low,,,,, rotate them every year,,, dvn, apa,
I just want to learn how to do options,,,,
So essentially I got paid to hold onto stock for a week, doesn't hit the price, contract expires and I just made some cash, it does and I buy the stock and no big deal because it is a good stock and I am buying it low...... Sounds like EASY MONEY to me, THANK YOU, You are a fantastic teacher and I am DEFINETLEY SUBSCRIBING!!!
Awesome! Feel free to dm me on insta or email me of you are interested in getting more advanced at options trading
That's how I see it too. It seems he is willing to buy the stock at the support level if that's how the trade plays out. You'd probably buy a stock at support level anyways.... why not make a little extra money if you are going to buy it anyways. I think the key is setting a strike price at or below support. That's my take ....
Just discovered your channel, I very much agree with you, selling puts on stocks we'd like to own is a great way to trade, as it's a win-win situation. Very glad I discovered your channel, seems you're doing a lot of great content. I'm also trading options and doing videos around them, it's cool to meet other options traders! 🙂
I follow you to but your not on TH-cam like this as much you do yours on fb right
Raymond Charles I’m active on both really 🙂
Questions:
1. How long do you have to wait to sell the shares?
2. If you have to pay the collateral, do you get the shares at the stock price?
3. If you buy a option share price at $0.11 and say it ends its expiration at $0.50. Would you have to have a collateral of $5,000, or would you still only have to pay $1,100 in stock collateral?
Thanks
I've sold covered CALLs and cash secured PUTS since March 3, 2022 and have generated about $3,162 in option premium as of April 22, 2022 using $45,711 in stocks and cash; or about $21,950 in cash.
Looking several months later and with NIO, the price kept going up, so the person with the stock did not exercise the option. Henry just received the $48.
With JPM, the price got down to around the mid 94s so again, the option was not exercised and Henry just got the premium. In hindsight, it actually would have been better if he had to buy since it has gone up, but he still "won".
With American Airlines, I think the price actually hit $12 exactly at one time. Not sure if the stock owner sold henry the stock. Lets assume he didn't so Henry ended up with the premium.
Workhorse went down to $22.59. So, he would have "won" at $22.50 but it was close. Definitely killed it at $20.50. That was easy money. *side note, workhorse has dropped a ton. not sure if stock split or bad news.
Thanks again for the info. I'm going to have to subscribe or research more into you. I just see everyone else talking in generic terms while you are actually doing it!
yesssir SPCE, SPAQ, SHLL.... FMCI.. LCA..... RKT definitely wanna hear your thoughts on RKT
Rkt please
easier said then done my friend .
dan brooks *than
I am starting to learn to dabble in stocks, while that's true! You have to take the plunge and try it, in that case nothing is easy!
looks pretty simple to me
Looking forward to your course, Unkie Henry. Question for you. Should I invest the bulk of my investment money in 1 or 2 of the stocks you recommend or is it better to spread it around in several different stocks (you recommend)?
Would you recommend holding workhorse?
Well I do trade it in the video so my entry is 20.5
Thank you Henry for the great informational video. This video made sense. I watched it twice and I paused it multiple times. Can your collateral be margin, or does it have to be settled funds?
My collateral is margin however I do not recommend using margin until you take the course and have a lot of experience. It is risky!
Henry can you do a video about the taxes on options? Thanks!
Can't wait for your course! I have some VG, I'd like to hear your take on it.
Soon!
I’m new to investing and this video was broken down so nicely. Thank you!
You're welcome!
Make Stoopid Money! lol! Great video. We are excited for your course!
Thanks Uncle Henry! u really help us to understand more! about this world .( always love ur background music )
which one would you recommend joining the Patreon or waiting for the course? since I don't have a robin hood in my country, so I'm not sure if there is any other platform that is the same here.... and I would love to know more about your strategy to get STOPIDD rich
Course for sure will be more value
Great demo. One comment tho... Airlines can't go bankrupt? Ouch.. Braniff Airlines, Midway Airlines, National Airlines, Pan Am Airlines, Eastern Airlines, Aloha Airlines... just to name a few.
Great job. Very detailed.
Do you make more money if the stock goes up? Or do you just get the credit and hope it doesn’t go below the strike price?
Hope it doesn't go below
Awesome as always Unc!
Thank you! Cheers!
I never received an email for your course. You said you sent out an email about it? I put in my email day two when u attached a link to one of your videos. I am going to put it in again with the link on this video.
It might be in your promotions!
That Nio price looking fine
Buddies any idea which kind of puts or call options people are buying what is target price of Nikola corporation. I'm 70% down in NACL
Just want to its ll bounce back or not
I invested 28k and the value is 5k
Any idea about NACL puts
Bounce back?
glad to have you…
That’s one thing I hadn’t understood, the collateral is money you’re supposed to have right? I can’t buy $300 call option. How am I supposed to cover $31,000 in “puts”? I find it funny how a lot of trades that make videos say “small account” and say “Yes you can start with $2,000-$5,000” I’m trying to start with $100-$200 and work my way up, I don’t mind the work but no one’s interested in going that low😔
Well I had a question maybe you can answer or make a video of it. HCACU seems to be a great buy for its evaluation but it’s not getting traction, what is going on with this stock? I have seen this before and as soon as I sold the dam thing skyrocketed to the moon!!! Does this stock have the same signs or am I wasting my time and should move on?? Thank you for your response in advance..!! :)
Please cover SPCE, and IPOB (Opendoor)
I couldn’t find the result after expiration date. Did you ever put the video for this video result?
Awesome video! What are your thoughts on SHLL?
Bring out the options course!!
Hey Henry! Thanks a lot for your great content that you are sharing with us!
I have a question, I saw that you use robinhood.com (US only) platform for trading options and beacause I am not from USA I cannot sign up. I just want to ask you if can recommend me another platoform that is suitable for EU?
Thanks and I appreciate your answer. Keep up the good work!
Immu has been trading hella hella sideways, is there anyway an option trade can benefit from it? Would love to see a video on that
Does it have to be done on Mondays only?
Nope I just like Monday so I can work the rest of the week
Hi Henry... can you do analyst on RKT.... just want to hear your take on it. Thank you.
I'm trying to provide my email to your options trading course but it keeps telling me to enter a valid email address
Maybe it's spelled wrong. Feel free to dm your email on Instagram!
I am probably the noobiest noob who's ever noobed. So, could someone please explain to me what the collateral number is on the right side, and what kind of risk is assumed by having it? If you're "asked to sell" a specific one of these options (context of the question is derived from reading the text that comes up right after you finish the order @10:01 after buying the "short put" on AAL), does that mean you forfeit that collateral entirely when forced to sell? Also, am I correct in that being asked to sell is synonymous with being "assigned"? Thanks to anyone who answers.
Your broker holds the collateral amount incase you are PUT the stock. It just means the broker set that amount in reserve so you have enough to buy the stock at the strike price on expiration. In other words you are promising to buy the stock at the strike price if the stock is at or below that price on expiration. Since the broker will not take your promise he requires you to have enough in your acct to cover the price. If it expires out of the money, the collateral is released and you can do it again. If in the money, your broker will use this amount to purchase the stock at the strike price and put the stock in your account. Hope that helps
I am green and trying to understand all the strategies. I don't understand what just happened. So what will need to happen next now that you sold the puts? What happens with the collateral? How can you lose and will you potentially gain more than 277? Thanks in advance for helping the stock illiterate over here 😄
Hey buddy. You should chdckout the option academy. Currently 50% off with code 100k
The collateral goes back to you if the options is NOT exercised. If it is exercised, then the collateral goes toward buying the actual stock that you agreed to buy when you sold the PUT.
You can lose if the option exercises and you are forced to buy at strike price, but the stock plummets below the strike price, because now you own the stock for more that what it is currently worth (assuming it plummeted). However if you find yourself owning the stock, and you did your technical analysis correctly, then it would most likely rise above support in a reasonable amount of time....and then you can sell the stock for a profit. Comments?
How do I sign up for the options course???
coaching.investwithhenry.com/optin
Thanks bro 👌
Will you please use think or swim or some other charting system other than yahoo finance. Will make the videos much more professional.
Yes
Yahoo zuks
Make video on PALANTIR bro!!!! 😎😏 new IPO
Good for you, started at 930 till 4 and ended up breakeven, so frustrating
You didn't lose money, try again.
Thanks Henry! How can I sign up for your course?
Just enter your email where I send regular updates.
Can I still sign up for the options class
It’s out in 30 days so yes
Henry, can we join your course from UK? I mean we only have T212 and Stake! Pls help
Yes it will teach you about options and stocks doesn’t matter where you are form
but what if the strikes are met? you end up with 1k worth of stocks?
Yes
@@InvestwithHenry so if I have stocks that are 800% gain can I use them to sell puts on them like a covered call?
I am here to get STOPID rich.
I feel Stooopit already
Smashed the like button so hard, my girl jealous
🤣🤣🤣 this comment is too funny
Henry, I love your channel and always really look forward to your videos, BUT...the music that is in the background is so distracting and I only want to hear YOU talk! Will you please consider not playing the music? Thanks!
I have considered it but unfortunately I think more people like it rather than get distracted. I will do my best to turn it down
Thank you!
Thaaaaannnnnnkkkkk YOU!
Can you do a follow up video to show how these options played out?
If u really wanted to you could reference it with the stock price and the expiration of the options he chose to see if he was forced to buy the shares or just end up with the premium
hey
yes, you could make the quantity you want for just click to get the premiums but at this cost? this is not a smart move for me as investor.
Uncly Henry I want to be in the course
Cool in 30 days!
Lets get STOOOPID RICH with that course in October! 🇲🇽👍
Hey Henry, what’s your opinion on AliBaba? Have you done a video on it as of yet? Can I get Stoopid Rich on it???
Not yet I should!
REIT Stocks video?
Workhorse is listed on the gsa.gov website 👀
WKHS is around 3 dollars now. Did you lose money by selling puts?
uncle henry!
Me! 🙋♀️🙋♀️🙋♀️
We cant do this in UK 😭
Iron condor!
haha yes too advanced for now on the channel but in the course and maybe in future videos
Ты русский? Как так хорошо говоришь? Хороший контент, очень интересно, продолжай.
Thanks I speak very fluently but cannot read quickly and cant write
I said the same thing haha jk I have no idea what they said there lol
All you made was 277, but you risked 31, 000, WTF? This does not seem like a good way to make money. Maybe I am missing something, but why the hell would I risk so much money just to make a couple hundred bucks? man this seems nuts bro.
The options are being purchased on a Monday and they will expire on Friday of the same week. If all the options expire out-the-money; i.e., the Friday closing price is higher than the option strike price, then the options will simply expire, resulting in no risk to the $31k in cash.
But, if the option expire in-the-money then the options could be exercised by the option buy and the $31k would be used to purchase 100 shares of each option contract. The risk is if the purchased stock immediately goes down to $0 in value or some lower number and never recovers.
But, the option seller can choose to buy back the option or roll the option to a further out expiration date and lower strike price if the option seller wishes to avoid an exercise of the option if it's in-the-money; so the risk can be mitigated.
I want to get stooopid rich
Hmm...$31,850 dollars to make $277 dollars for a 8.7% return IF, and a BIG IF, all goes as planned. Maybe it's just me but the juice doesn't seem worth the squeeze here.
risking 9k to make 48 dollars!!! wow
Don't say that you and answer either email thank you
Nikola going to 0 option
Please Spce
10:40 spoiler alert . Stock crashes
You're risking $31,000 in capital to make $277? Really...
Im thinking the same as you, For me honestly is not a good investment this quantity for this little gain.
Don't be silly you 2 comments 277 a week on $31,000 is way more than 45% annual results. Please show me your trading results or anyone else that makes 45% consistently... I have never seen it occur so from my experience I have the highest relatively safe strategy aside from YOLO wkhs or so other stock that gets you fast money and the next day falls and you left at 0%. With all respect I love comments and I am happy with this these comments but I can tell you are new to investing. Typical market return 10% so I am getting 4 times more than typical. If you beat my returns in a week okay but I can bet comfortably 99.9% of people cannot get a consistent return of over 30%. I've seen 1000's of accounts and have data on this. :)
@@InvestwithHenry You are out of your mind, thinking that risking $31,000 to make $277 in a week and that risking ($31,000 x 52 weeks) $1,612,000 to make $$14,404 ($277 x 52) is a good risk/reward scenario, you're the one CRAZY. That's dumb. Anyone who follows this logic will lose ALL their money with 2/3 trades that goes bad. These are individuals not institutions with unlimited capital. This option strategy for individuals is dangerous. later.
Seriously, last week it was covered calls that went bad in hurry, now it's willy nilly naked puts for peanuts on robinhood. Top shelf sketchy!
Edit: ok, cash covered puts, sketch level revised to middle shelf, carry on...
Uncle Henry! I dont like your ads
sorry, helps me keep creating videos while I make the course
No one should try to invest with this guy or anyone that is recommended on any his comments. They are all scammers. I learned the heard way.
Bottom line to believe any one that wants to trade for you with bitcoin transaction.
Correct do not look at any scammers in comments!
@@InvestwithHenry the point is are u among the scammers? Do u work with them? Because i invested with your email officialhenrylucas@gmail.com, and i never got my money back. Also invested with julianagunawanlee@gmail.com, never hear from her again.
Жду :)
Too bad I don't have a $100,000 account to make 500 a week
Where is the second part? You loss money 😄
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Clueless as to what you just did?
Will teach in options course from 0