Passive Income by Selling Options (Easiest Way To Profit)

How I generate passive income and make $5,000 per week selling options.

Welcome back to Pandrea finance, my name is Alex Pandrea and today I am going to show you my strategy for selling options for passive income - how I enter trades, which strike prices I choose, and more importantly how I close out my trades to continuously collect income on a weekly or monthly basis. Now at the end of the video I am going to share with you the exact step-by-step game plan that I follow whenever I sell options.

When you buy options, you PAY a premium for the option. When you sell options you COLLECT a premium. The money goes from the buyer of the option to the seller of the option. Since both the buyer and seller are betting on the same option only 1 can win the trade - as in - the option can either expire IN the money or OUT of the money. The buyer is hoping the option expires IN the money. The seller is betting that the option will expire OUT of the money. This is in essence the ultimate goal of buying and selling options - and you make profit as that goal becomes a reality in the markets. Here is the interesting part (all info in video)

Moving on to the second part of this strategy - the different ways that you can make money selling options. Selling options can be broken up into 2 categories - selling puts and selling calls. Here is a chart explaining each.

SELLING PUTS
- Selling puts gives the seller the obligation to purchase stock at a given strike price if that option expires in-the-money and the option is exercised.
- If we want to sell options for income we do NOT want our stock price to drop below our strike price. If that happens we may be forced to buy 100 shares the company for every 1 option contract we sold.
- We MUST have collateral in the form of CASH to cover our position in case we are forced to buy the stock.
- If the stock price does NOT drop below our strike price then we get to collect the entire premium.

SELLING CALLS
- Selling calls gives the seller the obligation to sell stock at a given strike price if that option expires in-the-money and the option is exercised
- If we want to sell calls for income we do NOT want our stock price to exceed our strike price. If that happens we may be forced to sell 100 shares of the company for every 1 option contract we sold.
- To cover our position we MUST have collateral in the form of shares. 100 shares for each option contract.
- If the stock price does NOT exceed the strike price then we get to keep the entire premium.

So to summarize the process of selling calls and puts - the first thing you do is to make sure you have the collateral necessary to start selling options. Ok so you have the collateral - then you pick an option you want to sell and you sell it. Once you sell the option you collect the premium and that money is then put into your account right away. That money is now yours to do what you want with but keep in mind - we’ll need to CLOSE our position by buying back the contract at some point. In the best case scenario the option will expire worthless and you won’t need to buy it back BUT in a lot of cases you might have the option be worth pennies but not quite zero and you don’t want to wait until expiration so you’ll decide to buy back the option at a lower price than what you sold it for and keep the difference in profit.

Its important to understand that this is a percentage game and the money that you’ll make is going to be in percentage terms relative to how much collateral you have - so we always look for a return on collateral to determine if a trade is good or not. Typically I look to make between 2 and 3% per month on the money I use for selling puts and calls - and through my experience it usually averages out to 2% per month return overall which is a great return.

Now here comes the most important part of selling options - closing the position and buying back the option. Now as you know our ideal scenario is to have the option expire worthless at expiration - this way you collect 100% of the premium - but is that really the ideal scencario? Well let’s look at a scenario - you sell an option expiring in 1 month and you collect the full premium. You want to hold on to that premium and not have to give it back - but next week lets say the option loses 50% of its value. Well in that case what I would do is to buy back that option and only keep 50% of the value of the option and then open up a new position rather than having to wait another 3 weeks for the other 50% of that premium. (Full strategy in video)

[PandreaMoney]

WOO! Got this video out despite my nasty cold all weekend. Hope you enjoy it! ALSOO…beware of scammers in the comments!! I DO NOT have whatsapp or any of that.

[Alternatezoid]

Trading has been rather rewarding to me and I've learned that getting a good return is very much attainable if you know your way around it.

[AshlelThomas]

Considering how volatile the stock market is right now, I think investors should focus on cheap stocks. Of my $270k portfolio, 35% consists of formerly well-regarded stocks that are currently experiencing a sharp decrease. I have no idea how to escape this awful circumstance.

[ElijahReuben-]

I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for....

[tonysilke]

So how exactly can we guard against the coming financial reset for 2024? Like what are really the best strategies to make our portfolio recession proof against the incoming financial reset? I'm very worried about my $110k stock portfolio.

[AliceAnderson-inet]

Crypto is risky as many would say but I think the actual risk in Crypto is not investing, buying the capitulation isn't a tough call, but it is a very tough call to figure out what to do aside holding. I remember when I just got into crypto back in 2019 but later in 2020 I ended up selling it because I was dumb and I didn't understand it. I studied and learned and now I know how it works. Got back into crypto early in 2023 with 10k and I’m up with 128k in a short period of time

[Gladys_smith]

I don’t know how, but you’ve managed to package an unbiased analysis that is more entertaining than the sensationalized segment of economic and financial news. Thank you for your efforts to be the signal and not the noise. I understand that the economy is currently in a downturn and that we must wait for the stock market to recover in order to break even and make profit..

[EliWesley]

I Hit 12k today trading. Started last month 2024. Financial education is indeed required for more than 70% of the society in the country as very few are literate on the subject. thanks to Louise O'Brien for helping me achieve this.

[dialac]

I have a suggestion. Make a part 2 of this video showing how to close a position and how you know it’s wiser to close the position than letting it expire. I still am not sure when and how to close options

[stephaniestella]

I must say you are an inspiration because I started up investing and trading as a scared investor who doesn’t want to lose money, glad to say I’m very profitable now and bought my first house through it

[Farmwald]

The stock market rally started Thursday strong but reversed solidly lower, undercutting the lows of the prior few days. It's a reason to be cautious in the very short term. But the pullback could be setting the stage for another solid advance. Tesla (TSLA) continued to climb Thursday, even though the EV giant pared intraday gains. TSLA stock has now more than doubled from its Jan. 6 bear-market low, I'm still at a crossroads deciding if to liquidate my $238k stock portfolio, what’s the best way to take advantage of this bear market?

[ANTHONY]

This used to be one of my most watched channels... sadly, it's been a while since i visited it has been a very rough year... i am experiencing one of the toughest phases of my life... Lost a fortune lnvesting in emerging companies. Hopeful, for a turnaround.

[alexsteven.m]

Recession is often the result of external factors, and it appears that the United States is losing its grip as a federal reserve currency. With a decreasing ability to control inflation and a reduction in stocks and oil trading, it seems that a new multilateral world order is on the horizon.

[Blitcliffe]

I started stacking to SAVE wealth. I've always been the type of person to spend my entire paycheck. I hate having money just sit in the bank. I am under pressure to grow my reserve of $950k. before I turn 60, I would appreciate any advice on potential investments.

[MIchaelGuzman]

I recently inherited almost $500k. I REALLY need to make this money work for me, and not just disappear over time. I've been scrambling for somewhere to put the money, where I can make an effort to use the gains to pay bills so I can quit my job . All roads have pointed to the financial market of some sort which is a good idea buh where else should I put money besides the financial market? We have a 13% RPI rate so cash is tough.

[raymondmiller]

*I learnt to manage my money through investments and it really works for me. They say money can't buy happiness but poverty can't buy anything.*

[Greggsberdard]

Acquiring a stock is easy, but buying the right stock without a time-tested strategy is incredibly hard. I’ve been trying to grow my portfolio of $210K for sometime now, my major challenge is not knowing the best entry and exit strategies ... I would greatly appreciate any suggestions

[Christine-wpbw]

My portfolio has good companies, however it has been declining since last year. I have lost over *$200K* in the stock market and i'm looking to improve my portfolio. How do i turn my portfolio around?

[gagnecaron]

If the stock you want to buy fell 40% the next day, would you buy more?
If no: don't buy the stock
If yes: buy the stock.

[ElvinWright]

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274, 800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.