Can you Really Make Money Selling Options 💰 How do you Trade Options for Income

Chapters
0:00 Intro
0:56 List of all our June option trades
1:26 Cash flow from selling put options, covered calls & LEAPS/PMCC
1:53 Non-leveraged COC return and return on margin
2:17 Selling put option in QCOM
5:33 LEAP and PMCC in DIS (Naked call and put option)
9:03 Covered call and bearish credit spread in CPB

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In this video I will show you exactly how much cash flow option traders can make by selling put and covered call options as well as using a Poor mans covered call strategy with LEAPS. I show you every trade we did last month in June and talk through 3 of my favorite option trades and the trading strategy we used for that trade. This will help you see how you can use these same strategies to consistently generate monthly cash flow, in your account!

Here you see a list of every option trade we did last month, in June. The red boxes are the trades we are going to talk about in this video. I will discuss the covered call and bearish call credit spread we did on Campbell Soup ticker symbol CPB after the stock was assigned to us because it experienced an overnight 8+% decline. I will also talk through our Poor mans covered call and naked put option position in Disney ticker symbol DIS as well as the put option trades we did in Qualcom, ticker symbol QCOM which paid us an awesome return!

At the bottom in the blue box, you see that because of selling Options, we pocketed $12,810. In the orange box you see that trading commission cost us $84.51. In the purple box you see that we were charged $32.75 for some option data fees and in the green box at the bottom right you see that we pocketed $153.50 in dividends from Realty Income and BDX as a result of the covered call positions we have in those companies. In all, we pocketed $12,846 from selling put and covered calls options as well as collecting some dividends. If you annualize that return, it equates to a 19.5%% annualized non-leveraged cash on cash return! If you calculate the return on the $136,273 margin requirement, it equates to a 115% annualized return on margin!

The first trade I want to talk through is the short put option we sold and then bought back 15 days later that paid us a 47% non-leveraged annualized cash on cash return in Qualcom (QCOM). Let me talk you through why we did the trade and how it turned out.

The next trade I want to share with you is in Disney and involves a poor mans covered call position as well as an additional naked call and put option. Let me talk you through what we’ve been working to accomplish with this position.

Happy investing!
Randy Perez

#highnetworth #financialfreedom #OptionTrades

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Disclaimer: I am not a financial planner and am not offering investment advice. This is an opinion channel only and should not be taken as any form of financial advice. The ideas and strategies that I discuss should never be used without first assessing your own personal/financial situation, or without consulting a financial and/or tax professional. There are financial risks involved in taking on any monetary transaction that I discuss in my videos. I may receive a small commission from the purchase of any item from using the links listed above.

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[krish]

so many gems and nuggets in this vid, great work Randy, thanks

[blp]

Appreciate the detailed examples. I believe it would be helpful, in addition to giving dates, to give number of days to expiration. I find myself trying to read the dates and calculate the time frames. Don’t mind the extra work but this would allow me to focus more on the directional choices and the basis for those choices.

[benius]

Love the videos but for each trade can you talk about what the worst case scenario could have been? The most important thing about any
Investment decision is risk management. It’s important to talk about how you would handle the worst case scenario risk management. Your content is incredible.

[mntemel]

Another priceless options strategy content. I wait for your videos like I'm waiting for the next episode of a Netflix series! Randy, I would really appreciate if you could record a dedicated video just on that Disney play, explaining it a bit more in detail, the moments you rolled those contracts and the decision theory behind them. Rolling Puts and Calls on same stock at the same time and their correlation as well as the worst case scenario risks.. Many thanks! MT.

[ShihabPersonalFinance]

great consistent monthly profit, glad to see there are different ways to generate profit with options selling, I like the calculation of annual rate of return, I dunno ive stopped selling naked calls, dont wanna deal with that stress, otm puts on red days is what I have found to work, for now haha

[giovannisilano]

What about using a put ratio spread?
Buy 1 atm or slighy in the money put
Selling 2 out of the money puts for a credit?
So if the price goes up, u keep the credit
If the price goes down u have a profit from your long put and u can roll your 2 short puts in time?
Basically its the opposite of a poorman covered call, trying to short the market and selling 2 puts for credit

[mtgkozan]

How do you sell naked puts? I've tried on webull and Schwab and it will only let me do cash secured puts. 😑

[seanlow]

Great video, as always, Randy! For your CPB strat - let's do a hypothetical - what if the CPB price, on August 1st, shoots up to $60 for whatever reason, that would mean you stand to lose $11*600 on your naked calls and your long call options will only net you 600*$5. so in this hypothetical, you will lose $6600 - $3000 = $3600?

[AlternativeLine]

Sorry im still confused.
So you buy a call long leap option and you hedge it by selling a short call option and later on a naked call option ? If it starts going in the money you roll ?

[ShinJLoh]

Don’t mind my beginner question, but wouldn’t it be really dangerous selling naked call options that are in the money (ITM)? Since there is a higher chance of those being exercised. Would it make more sense to sell a further OTM call option? So in this scenario if $DIS was $180 per share then wouldn’t it be better to sell a call option with a $190 strike price to be ‘safer’? Thanks for your insight and knowledge 🙏🏻 much appreciated

[billestep]

Do you guys wheel or just collect premuim. I’ve started to do some strangles and collar s in this low vix environment

[kevinsjournal]

Hope we can make money doing this lol, crazy I'm 1st comment lol