Thanks for watching! ▸ Try Seeking Alpha Premium: seekingalpha.me/dividendgrowthinvesting ▸ Try M1 Finance: dgitofi.com/TryM1 ▸ Try Robinhood for options selling: dgitofi.com/Robinhood ▸ Book 1:1 time with me to talk about DGI or options: dgitofi.com/TalkWithJake
@@evasanz3466 Hey!! I set between 2-3 ads per video depending on how long the video is. TH-cam changed how you monetize videos on youtube. They made it a lot easier.
Couple of important points. Option selling is not investing, it is TRADING. As is option buying. Selling is for income, buying generally is for speculation. Second, and perhaps you mention this later in your video, never, ever, sell a naked call. (as a single leg option), why? because all you get is potential income, and have potential unlimited loss. Covered calls are safe, what I call naked puts are safe, (if you are comfortable owning the stock), (also call cash secured puts) but NOT naked Calls.. I think selling options IS a potential revenue stream for retirees and those with time, and able to evaluate risk but it is not for everyone. Investing IS
Yeah its important to understand what you are doing and the risks with it. Im pretty simple with how I do it and there are a lot of different ways that you can make it work.
I respectfully disagree, options SELLING, IS investing. Option BUYING, is gambling, IF ITS done purely on speculation. No hate no argument, just opinions bing voiced. I am a seller of options. It’s my way of dollar cost averaging. And then I sell covered calls above my cost at a calculated delta and % above my cost. THAT is investing. Cheers 👍
Selling options is a form of investing, and even buying options still qualifies, but options selling is not passive. In addition to the extensive knowledge you need to properly make it work even close to just sitting on your hands and selling profits as needed, it takes ongoing time to assess which options to take at what intervals. It *really* isn't as simple as a quick glance at the premiums and boom "passive income". One wrong call and you're out of years worth of gains as the shares are assigned or rolled at a loss. Some might try to use the argument that it's not a loss because you got the premium and the shares are being sold higher than purchase yadayada...but low enough profits on top of actual losses is *actually* a way to decay an otherwise healthy portfolio over time. Neither options nor dividends are free money. Know the risks and sources of all your money. Then you can better prepare for the inevitable downside risk manifesting.
@@xaldath4265 you obviously don't know difference between a long-term activity such as investing that you do regularly .and an activity done for the short term, requiring skill and knowledge called trading
I have been trying to learn options trading by watching numerous TH-cam channels. It can be quite confusing for a beginner like me. Now I finally understand most of the basics of options trading. However, I came across an informative video by Jake which I highly recommend. This video will save you a lot of time and effort in searching for useful information on options trading. It provides clear and concise guidance to help beginners like you spark your interest in the right direction and make wise and profitable decisions. Thank you Jake for this video! Love the comparison of options trading like a insurance and a casino by the way.
The best part about options is you have the ability to control your risk and maximize your gains by closing out (or rolling over)the option before the expiration date.
ThanX Jake... Great video. Enjoyed it a lot.... Looking forward to your other videos about Covered Calls as well as dividend investing. Some confusion for me is - how to elect a stock for Covered Call.... especially if the stock has dropped and you're in the hole. It would be great if you could actually go thru and set up a simulated Covered call and what you do and why you do it that way. Thanks again for all of your great videos. Kudos to you for some great Options Trading....
Great video, Jake!! I used Roth and brokerage accounts in Fidelity to do options. Only paying taxes on brokerage account only. Hopefully you can give us more guidance on options. Thank you.,
Hey Jake great video, have you ever heard of poor man cover calls? Would love to learn more about that part where a person like me who don’t have an abundance of cash laying around to start selling calls and puts.
Greetings! I am an options (wheel strategy), crypto and dividend investor from Spain... I do something I call cascade, I fill in 50k to 50k so options, cryptos and dividends... Cryptocurrencies are passive income because I get profitability and dividends for obvious reasons as well. I'm not going to go into much detail. I just wanted to stop by and say thanks for all your content :) I was excited to see this video, I am not the only former dividend holder, although I am still one but not exclusively. Thank you and I will continue watching you
Great video! Thanks to your clear explanation and the analogies of the insurance company and casino, I finally understand covered calls and cash-secured puts. However, as a non-US citizen and a non-resident, I'm subject to a 30% tax on dividends but not capital gains. The video wasn't clear on whether covered calls and cash-secured puts generate capital gains or are taxed like dividends. Could you please clarify? Thank you in advance 🙏
also! be mindful of earnings.... if the stock takes off, you could have your shares called away... i dont sell covered calls when a company is going to announce earnings.
Good video but you should watch your position sizing! I limit mine to 5%. If PLTR and SOFI blow up you are in trouble. You could also do put credit spreads for downside protection instead. You are also missing out on 2K or more a month on money market interest if you had Fidelity. They pay 5% on the collateral for CSP's. Cheers!
I like the best of both worlds. I sell covered calls on some of my divi stocks after they have had a good run up. Get a little extra invome out of them, always having strike above average
Hi Jake. Wondering do you trade options in a taxable account or tax deferred? Will you share next week which stocks you have been using to write options on? Thank you for all your great content :)
Hey! I do it all in a taxable account because I use the money to pay for my living expenses today. Yeah I will talk more about it next week and give examples.
Good video. One question arose as you mentioned div stocks aren't good for selling cash secured puts. If you want the underlying and its close to your acceptable buy price, what difference does time play other than you risk not getting filled?
You can use your margin buying power as collateral to sell puts so you are kinda using the shares as collateral, but if you run out of buying power you could get a margin call.
If premiums are low for dividend stocks. How do you own the correct stocks on which to write covered calls? I remember once I did look at Verizon which I own but the premiums for writing calls were laughably small.
Great video, and strategy! I run a similar strategy but on a more conservative basis. I can definitely see options as a way to generate significant income when done in an active manner. Best of luck in your journey!
What are your thoughts on meta becoming a dividend stock? I'm assuming you consider it like schg, something you won't purchase because it's both a growth stock and dividend.
That’s correct with Fidelity since I have my Roth and my individual accounts with them. I get premium on selling put while collecting 5% interest. Just like Jake, I’m very conservative, try not to get assigned (downside: lower premium)
I do this in both my Fidelity (SPAXX) and Charles Schwab (SWVXX). Great way to double dip and earn 5% on your cash and sell cash secured puts for extra income! I don't mind getting assigned, as I'll just turn it around and sell covered calls on the assigned shares, rinse and repeat.
Very informative, I trade covered calls on some of my dividend stocks and I find it's a great way to generate extra income in this volatile market. October-December of last year was a pain with the market making huge gains, I and many others had shares called away due to that upward climb.
I only use them for options selling nothing more. I personally keep my IRA at vanguard. Really depends on the person. One person's trash is another person's gold.. who knows..
Love the content. Do you think there is a reason why this income stream isn’t discussed more often? I thoroughly enjoy selling CC and CSP and get excited to utilize it during “retirement” as well. I’m just baffled it doesn’t get discussed more when also trying to live off dividends down the road.
Hey! There are some channels out there that only talk about CC and CSP. I think CC and CSP is a great option if you are focused on dividend investing. It is a great way to boost your income with less capital.
As a young investor, is it bad to allocate a large majority of of my capital to growth etfs and then reallocate it later in life to a dividend based portfolio?
im very conservative when selling covered calls... My goal is to generate reinvestable income to on top of my weekly contributions. its defiantly a game changer.... The most important thing to remember is to only do this with stocks or etfs that you're bullish on! dont buy 100 shares of crap bc you'll lose money long term.
@@DividendGrowthInvesting yup! my best example is Uber. I’ve do weekly covered calls that generate $10-20 per contract. Which I use to buy an extra share of schd per month. It all adds up over time.
Buenas tardes from Bucerias Mexico Jake! I am currently watching, loving, and appreciating you throwing in the options play and explanations. This is exactly what's on my radar to learn and have more diversity. Love your flow as always!
Hey!!!! Appreciate it man! Options selling can be a great way to diversify your income. We really enjoyed our time in Panama. Considering Panama for next year again or even other areas in South America!
@@DividendGrowthInvestingyes I understand that but I thought brokerage like Fidelity even with margin still pays you interests on your collateral but I may be wrong I need to call them and double check. Great video it seems you are holding 90k shares of $SOFI that’s legendary
@@josephsaeteurn9158 I think you’d have to put it in your cash account not in the investing account in Robinhood. I don’t get any interest on the extra money I have in my investing account.
You own 90,000 shares of SOFI? Is that a long term hold for you? I converted from USAA to SOFI 2 years ago and it’s my top individual holding. 1% of my overall portfolio. However, just curious if this particular stock is something you are confident in long term?
Understood and thanks for the reply. I saw that you own Palantir as well. I look forward to more of your videos. I’m guessing you like those stocks because of the IV with options. Not necessarily the underlying company
Imagine if all you did was sell puts on waste management lol. The massive returns you’d have haha. You may not even own the stock! Good lord what a runner. Bullish WM! 😅 I still don’t own any shares. Selling puts continually. Wow what a cash cow
I trust myself with my money selling premium far more than I trust JEPI, and I make much more than JEPI and the other covered call ETF's. No one cares about your money more than you do.
I have not watched the video. But in my opinion, you really have no real arguments if you never have done options before. You are not the guy to compare with if you have no experience. Now I'll watch it
@@ethanshy280 I hope it helps give you a better picture of what you can do with options selling. I will talk more about it next week and give more real life examples and things that I did wrong and what I would avoid if I could start over.
Cash Secured Puts and Covered calls can be a great way to boost your income potential. They provide more income potential with less capital invested compared to dividend investing - though the income can be less reliable due to market volatility.
Thanks for watching!
▸ Try Seeking Alpha Premium: seekingalpha.me/dividendgrowthinvesting
▸ Try M1 Finance: dgitofi.com/TryM1
▸ Try Robinhood for options selling: dgitofi.com/Robinhood
▸ Book 1:1 time with me to talk about DGI or options: dgitofi.com/TalkWithJake
@@evasanz3466 Hey!! I set between 2-3 ads per video depending on how long the video is. TH-cam changed how you monetize videos on youtube. They made it a lot easier.
Couple of important points. Option selling is not investing, it is TRADING. As is option buying. Selling is for income, buying generally is for speculation. Second, and perhaps you mention this later in your video, never, ever, sell a naked call. (as a single leg option), why? because all you get is potential income, and have potential unlimited loss. Covered calls are safe, what I call naked puts are safe, (if you are comfortable owning the stock), (also call cash secured puts) but NOT naked Calls.. I think selling options IS a potential revenue stream for retirees and those with time, and able to evaluate risk but it is not for everyone. Investing IS
Yeah its important to understand what you are doing and the risks with it. Im pretty simple with how I do it and there are a lot of different ways that you can make it work.
I respectfully disagree, options SELLING, IS investing. Option BUYING, is gambling, IF ITS done purely on speculation. No hate no argument, just opinions bing voiced. I am a seller of options. It’s my way of dollar cost averaging. And then I sell covered calls above my cost at a calculated delta and % above my cost. THAT is investing. Cheers 👍
Selling options is a form of investing, and even buying options still qualifies, but options selling is not passive. In addition to the extensive knowledge you need to properly make it work even close to just sitting on your hands and selling profits as needed, it takes ongoing time to assess which options to take at what intervals. It *really* isn't as simple as a quick glance at the premiums and boom "passive income". One wrong call and you're out of years worth of gains as the shares are assigned or rolled at a loss. Some might try to use the argument that it's not a loss because you got the premium and the shares are being sold higher than purchase yadayada...but low enough profits on top of actual losses is *actually* a way to decay an otherwise healthy portfolio over time. Neither options nor dividends are free money. Know the risks and sources of all your money. Then you can better prepare for the inevitable downside risk manifesting.
@@xaldath4265 you obviously don't know difference between a long-term activity such as investing that you do regularly .and an activity done for the short term, requiring skill and knowledge called trading
You said it, my friend. You are correct.
I have been trying to learn options trading by watching numerous TH-cam channels. It can be quite confusing for a beginner like me. Now I finally understand most of the basics of options trading. However, I came across an informative video by Jake which I highly recommend. This video will save you a lot of time and effort in searching for useful information on options trading. It provides clear and concise guidance to help beginners like you spark your interest in the right direction and make wise and profitable decisions. Thank you Jake for this video! Love the comparison of options trading like a insurance and a casino by the way.
Really glad to hear it was helpful!! Thanks for watching!
great info, I have always been hesitant of options trading but it's good to know more about it.
A few years ago I would have never been open to it. Like with everything, the more you educate yourself that fear of the unknown goes away.
I don't sell naked calls. But I do sell calls naked.
Awesome explanation, simple and clear! I am looking into do the same strategy in a near future and this video made me more confident! Thank you!
Glad it was helpful!
The best part about options is you have the ability to control your risk and maximize your gains by closing out (or rolling over)the option before the expiration date.
Well said!
ThanX Jake... Great video. Enjoyed it a lot.... Looking forward to your other videos about Covered Calls as well as dividend investing. Some confusion for me is - how to elect a stock for Covered Call.... especially if the stock has dropped and you're in the hole. It would be great if you could actually go thru and set up a simulated Covered call and what you do and why you do it that way. Thanks again for all of your great videos. Kudos to you for some great Options Trading....
Great video, Jake!! I used Roth and brokerage accounts in Fidelity to do options. Only paying taxes on brokerage account only. Hopefully you can give us more guidance on options. Thank you.,
Hey!! Yeah next week I’ll talk more about how I do it. There are many ways you can approach it.
Yes do a video of how you sell your options.
Would love to hear more about this.
Hey Jake great video, have you ever heard of poor man cover calls? Would love to learn more about that part where a person like me who don’t have an abundance of cash laying around to start selling calls and puts.
Yeah I've looked into them and its not a bad place to start!
Greetings!
I am an options (wheel strategy), crypto and dividend investor from Spain...
I do something I call cascade, I fill in 50k to 50k so options, cryptos and dividends...
Cryptocurrencies are passive income because I get profitability and dividends for obvious reasons as well.
I'm not going to go into much detail. I just wanted to stop by and say thanks for all your content :)
I was excited to see this video, I am not the only former dividend holder, although I am still one but not exclusively.
Thank you and I will continue watching you
Great channel! love dividend investing and selling options!
Hey!!! Thank you so much! Great minds think alike!
Love the channel and the solid advice.
Appreciate you saying that!! 🙌🙌
Great video! Thanks to your clear explanation and the analogies of the insurance company and casino, I finally understand covered calls and cash-secured puts. However, as a non-US citizen and a non-resident, I'm subject to a 30% tax on dividends but not capital gains. The video wasn't clear on whether covered calls and cash-secured puts generate capital gains or are taxed like dividends. Could you please clarify? Thank you in advance 🙏
also! be mindful of earnings.... if the stock takes off, you could have your shares called away... i dont sell covered calls when a company is going to announce earnings.
very good point!
Great video
Glad you enjoyed it!
Good video but you should watch your position sizing! I limit mine to 5%. If PLTR and SOFI blow up you are in trouble. You could also do put credit spreads for downside protection instead. You are also missing out on 2K or more a month on money market interest if you had Fidelity. They pay 5% on the collateral for CSP's. Cheers!
100% That is the mistake I made that I will talk about next week.
Started selling weekly cash secured puts and covered calls about a year ago. FUN!
nice!!
I like the best of both worlds. I sell covered calls on some of my divi stocks after they have had a good run up. Get a little extra invome out of them, always having strike above average
Next video best covered call etfs.
Pretty good timing with this! I recently made a video on this. You can check it out here: th-cam.com/video/FGa-1eTb_2c/w-d-xo.html
Not worth it. Better to DIY.
Hi Jake. Wondering do you trade options in a taxable account or tax deferred? Will you share next week which stocks you have been using to write options on? Thank you for all your great content :)
Hey! I do it all in a taxable account because I use the money to pay for my living expenses today. Yeah I will talk more about it next week and give examples.
Good video. One question arose as you mentioned div stocks aren't good for selling cash secured puts. If you want the underlying and its close to your acceptable buy price, what difference does time play other than you risk not getting filled?
Just the risk of getting assigned and paying taxes.
Also can you use shares as collateral to secure puts
No you would need the capital in cash or margin as collateral.
You can use your margin buying power as collateral to sell puts so you are kinda using the shares as collateral, but if you run out of buying power you could get a margin call.
Thanks for the vid, the transparency and looking forward to the follow up video.
Been wanting to learn more about Options trading, so thank you!!
Glad it was helpful!
Excellent presentation Jake❤ 💯
Thanks so much!
If premiums are low for dividend stocks.
How do you own the correct stocks on which to write covered calls?
I remember once I did look at Verizon which I own but the premiums for writing calls were laughably small.
I'm very interested in more videos on this topic. Love the channel !
Awesome, thank you!
Hi great share. Have also started on options. Have you thought of running options on SPY or QQQ?
Yeah that’s a great way to start when learning. It’s hard though to make any money from the premiums without increasing the odds of getting assigned.
Thanks for the info jake. Appreciate the honesty and openness.
Hey Brevin! Thanks man. Appreciate you saying that!
Great video, and strategy! I run a similar strategy but on a more conservative basis. I can definitely see options as a way to generate significant income when done in an active manner. Best of luck in your journey!
That is what I like the most about this is there are many different ways that you could approach it. Thanks for watching!
What are your thoughts on meta becoming a dividend stock? I'm assuming you consider it like schg, something you won't purchase because it's both a growth stock and dividend.
I don't plan on buying it but I could see a case for someone to pick it up as a satellite position making up
I was told a person can collect interest on the cash used to secure puts. Do you have any knowledge on this. Thanks
I have seen some people type that fidelity offers it, but I cant confirm it.
That’s correct with Fidelity since I have my Roth and my individual accounts with them. I get premium on selling put while collecting 5% interest. Just like Jake, I’m very conservative, try not to get assigned (downside: lower premium)
@@BrianHuynh95 good to know! Yeah my focus is not getting assigned.
I do this in both my Fidelity (SPAXX) and Charles Schwab (SWVXX). Great way to double dip and earn 5% on your cash and sell cash secured puts for extra income! I don't mind getting assigned, as I'll just turn it around and sell covered calls on the assigned shares, rinse and repeat.
If you’re not using fidelity’s spaxx while writing C.S.Puts you are leaving 5% interest on the table.
Very informative, I trade covered calls on some of my dividend stocks and I find it's a great way to generate extra income in this volatile market. October-December of last year was a pain with the market making huge gains, I and many others had shares called away due to that upward climb.
Yeah that is definitely one of the downsides of it. But a gain is a gain I guess.
Covered calls for life!
yes!!!
That's why I sell options and people calling me crazy for doing that. Had I depend fully on dividends, it will take me ages.
yeah it can be a great way to generate some more income with less income.
Hey Jake, What do you think of the Robinhood IRA?. I was thinking of switching over but people keep saying RH is trash.
I only use them for options selling nothing more. I personally keep my IRA at vanguard. Really depends on the person. One person's trash is another person's gold.. who knows..
@@DividendGrowthInvesting I do have my IRA with m1, but I was thinking of transferring. Not a fan of money weighted return.
Which brokerage allows writing put calls on margin based on securities. Mine allows only put writing with cash on hand
You have to enable margin investing in your brokerage settings.
at schwab you have to get approved to sell puts naked.
Would it be possible to show yourself buying a put/call for next weeks video?
I plan on it for next week :)
Love the content. Do you think there is a reason why this income stream isn’t discussed more often? I thoroughly enjoy selling CC and CSP and get excited to utilize it during “retirement” as well. I’m just baffled it doesn’t get discussed more when also trying to live off dividends down the road.
Hey! There are some channels out there that only talk about CC and CSP. I think CC and CSP is a great option if you are focused on dividend investing. It is a great way to boost your income with less capital.
Jake early this week!
Yeah!!! We are going to go on a walk early today to enjoy the nice weather here in Austin!
“i did it” 👶🏼
@@19Rinka86 lol :D
You have to pay taxes on the premium?
Yes it is taxed as a non-qualified distribution. At the 24:15 mark I talk more about taxes.
Ok thanks
As a young investor, is it bad to allocate a large majority of of my capital to growth etfs and then reallocate it later in life to a dividend based portfolio?
nothing wrong with that at all. It can be a great way to approach it. With everything it comes with pros and cons.
im very conservative when selling covered calls... My goal is to generate reinvestable income to on top of my weekly contributions. its defiantly a game changer.... The most important thing to remember is to only do this with stocks or etfs that you're bullish on! dont buy 100 shares of crap bc you'll lose money long term.
yup! You could also invest in non paying stocks and even generate more income from covered calls!
@@DividendGrowthInvesting yup! my best example is Uber. I’ve do weekly covered calls that generate $10-20 per contract. Which I use to buy an extra share of schd per month. It all adds up over time.
Buenas tardes from Bucerias Mexico Jake! I am currently watching, loving, and appreciating you throwing in the options play and explanations. This is exactly what's on my radar to learn and have more diversity. Love your flow as always!
Hey!!!! Appreciate it man! Options selling can be a great way to diversify your income. We really enjoyed our time in Panama. Considering Panama for next year again or even other areas in South America!
Correct me if I am wrong but Robinhood doesn’t pay interest on your cash secured puts collateral money. I mean your real money not margin obviously
No, you wouldn't get paid interest on your collateral money. You could put your premiums you receive in the cash account to collect interest.
@@DividendGrowthInvestingyes I understand that but I thought brokerage like Fidelity even with margin still pays you interests on your collateral but I may be wrong I need to call them and double check. Great video it seems you are holding 90k shares of $SOFI that’s legendary
@@hhhamed lol yeah that 90k has been a wild ride lol
i thought they do... its your money on collateral just like fidelity.. if you are on margin than no you dont get.. go all cash account..
@@josephsaeteurn9158 I think you’d have to put it in your cash account not in the investing account in Robinhood. I don’t get any interest on the extra money I have in my investing account.
When are you going to get to the dividend part? 🤣🤣
lolol :D
wait, your portfolio is almost 800K.. can someone with just 25K do something like this? live the FIRE life in 10 years?
Of course. It all depends on your expenses.
Max out 401k, IRA Buy a House rent the extra Rooms!
It can be done.
You own 90,000 shares of SOFI? Is that a long term hold for you? I converted from USAA to SOFI 2 years ago and it’s my top individual holding. 1% of my overall portfolio. However, just curious if this particular stock is something you are confident in long term?
I don't plan to hold it really long-term. I'm a fan of what they are doing, but not something that I'm deadset on holding.
Understood and thanks for the reply. I saw that you own Palantir as well. I look forward to more of your videos. I’m guessing you like those stocks because of the IV with options. Not necessarily the underlying company
@@maxwellhendrix1972 well short term I could hold them but no emotional attachment.
Imagine if all you did was sell puts on waste management lol. The massive returns you’d have haha. You may not even own the stock! Good lord what a runner. Bullish WM! 😅 I still don’t own any shares. Selling puts continually. Wow what a cash cow
lol i know right!!!!
Hi third
Hey!!!
NUST and PUTW are decent put write etf.
Yeah I’ve briefly looked at them but haven’t done a deep dive yet.
Nust?
@kookiebush Sorry NUSI Their expense ratio is high, but they recently changed the way they write puts and the bad has recovered pretty well.
I'll do a covered call ETF before I ride a bicycle on the edge of a huge cliff.
lolol
I trust myself with my money selling premium far more than I trust JEPI, and I make much more than JEPI and the other covered call ETF's. No one cares about your money more than you do.
I have not watched the video. But in my opinion, you really have no real arguments if you never have done options before. You are not the guy to compare with if you have no experience.
Now I'll watch it
:)
@@DividendGrowthInvesting - I was hoping he would come back and comment again after watching the video.
First
Hey Ethan!!
Thank you for making this! I’m particularly excited for this video!
@@ethanshy280 I hope it helps give you a better picture of what you can do with options selling. I will talk more about it next week and give more real life examples and things that I did wrong and what I would avoid if I could start over.
TLdR anyone ?
Cash Secured Puts and Covered calls can be a great way to boost your income potential. They provide more income potential with less capital invested compared to dividend investing - though the income can be less reliable due to market volatility.
Thank you ! That’s exactly what I do.
I’ll never ride a bike again
Lol
Great video
Glad you enjoyed it!