Make Money Selling Cash Secured Put Options | Beginner Options | Wall Street Bets
Subscribe to my Youtube Channel here: http://subscribe.samkling.com
Make Money without owning a stock | Cash Covered Put | Beginner #Options #robinhood
How to Trade Options Video: https://youtu.be/sTjnEEEBcdY
Subscribe: http://subscribe.samkling.com
Broker I use to trade (Get 1 free stock): http://robinhood.samkling.com
Charts I use: http://charts.samkling.com
Other brokers I use & recommend:
M1Finance (get $10 free): http://m1finance.samkling.com
Webull (get 1 free stock): http://webull.samkling.com
Covered Call Video: https://www.youtube.com/watch?v=SrBTqAVtqjo
Technical Analysis: https://youtu.be/my5xT9jUmaw
Rolling Options: https://youtu.be/uUQrbnVynzs
Cash Covered Put | Make Money Selling Cash Secured Put Options | Beginner Options
In this video I will describe an options #trading strategy that will allow a #stock #market #investor to make money without owning a #stock called the #Cash #Covered #Put.
Welcome back to the SK investing show. My name is Sam and today I am going to be talking about put options.
Before we get into #CashCoveredPuts lets start out with some #put #option #basics:
If you already understand Put options and would like to skip ahead to cash covered puts then you can skip ahead to this time here:
#Put #Options
If you remember in the last video talking about #Call #options and #Covered #Calls, #put #options are in simple terms the opposite of call options.
Put options are a bearish strategy for when you think the stock or the market is going to go down. Kind of like a bet against a stock.
There are 3 parts to an #options #contract:
#Strike #Price
#Premium
Expiration date
Let’s say for example we think #Apple’s stock price is going to go down this week. So we can look at #Apple’s option chain and select to BUY 1 Put option expiring this friday. By Purchasing this put option we are given the right to sell 100 shares of #Apple #stock at the strike price we selected, on or before this friday…IF #Apple’s price falls below the strike price. If #Apple’s price closes on Friday above the strike price then our contract expires worthless because it makes more sense for us to sell shares at market price since we would get more for each share.
In walks #Theta #Gang:
#ThetaGang is a group of options trading techniques in which the trader sells premium and profits off of #THETA Decay aka time decay of the options contract
The options strategy I want to talk about in this video is called the “Cash Covered Put” also known as the “Cash Secured Put”
Cash Covered Put:
Just like a typical Put option you have 3 parts to it: Strike Price, Premium, and Expiration Date. The key part of a Cash Covered Put is having enough money to buy 100 shares. Because by selling a put you are agreeing to a contract to buy the shares at the strike price and in return you get paid premium for this obligation. Having Cash available is key here because the whole idea behind this is if the price falls below the agreed upon strike price then you will be “assigned” shares aka forced to buy the shares at the agreed upon strike price. If you don’t have the full cash amount available then you will be taking on those shares in margin, which I don’t recommend unless you are an advanced investor. Just like margin can amplify gains it can amplify losses.
Now what is the goal here?
The goal of selling puts is to collect premium. This strategy allows you to make money without ever owning the stock OR collect money as you wait for the stock’s price to come down and you get assigned at the strike price you sold. Let’s take a look at an example my favorite beaten down stock of the 2020 market crash — #American #Airlines: #AAL is currently #trading at roughly $19 and that means in order to purchase 100 shares of AAL you will have to spend $1900. But I wouldn’t just buy #American #Airlines at market price, that would be silly. They have been absolutely beaten over the last couple months and made an insane run up! I would only buy #AAL if someone paid me to
This means if come next friday #American #Airlines is trading below our $14 strike price I will be assigned 100 shares of AAL at $14 and my $1400 collateral will be used to buy them. You always KEEP the premium. Selling put options is a fantastic way to collect extra income while you are waiting for a stock to pull back. Thanks for watching! And if you’ve enjoyed this video as well as my other videos please consider liking this video and subscribing to my channel for more helpful investing videos in the future!
Thanks for watching!
contact: skinvestingshow@gmail.com
Read my articles: https://medium.com/@skinvestingshow
Beat made by Chuki Beats: http://www.youtube.com/user/CHUKImusic
Subjects I also enjoy: #dividend #investing #trading #IRA #Roth #stocks #stockmarket #coveredcall #calloptions #putoptions #growthinvesting #valueinvesting #personalfinance #ziptrader #sundaystocktalk #sunday #stock #talk #top3stocks #wallstreetbets
