Selling Stock Options For A Living

Pitfalls of selling stock options like naked puts.

Selling stock options for a living.

In the world of buying and selling stock options choices are made in regards to which strategy is best when considering a trade investors who are bullish can buy a call or sell a put whereas if. Stock enthusiasts commonly wonder whether it s possible to make a living trading stocks. Often selling naked puts is a trade of small amounts which over months of constantly selling naked puts against stocks can result in reasonable monthly income however there is nothing worse than selling a naked put for 50 cents and ending up buying it back for 1 50. Selling options whether calls or puts is a popular trading technique to enhance the returns on one s portfolio.

To some it seems like an impossible fantasy but it is possible to make a living trading stocks the real question is if it s probable. Knowing that there are two certainties in the market it makes selling options a very attractive strategy. I ll highlight why selling weekly put options is the best weekly option trading strategy to learn. But let s say we had a 100 000 portfolio.

Something to consider is how long you plan to hold the option for. You can day trade the stock option or hold it for a swing trade depending on the setup although options are used mostly for swing trades if you buy an option in the morning sometimes taking profit the same day is the best course of action if resistance is encountered or a desired profit level is achieved. Writing puts for income offers the best combination of risk reward. With the goal of living off dividends i can increase my income and reinvestable capital by successfully writing put options for income.

Selling options on slumping stocks is only part of the fun. The idea that you could quit your job and support yourself just by trading stocks is fascinating. Naked puts are options trades in which you sell the right for another investor to sell put a certain stock to you at a specific price strike price if the stock falls below that. You can also profit from directional moves.

So selling options on a 5 000 portfolio for a living is not very realistic because a 100 yearly return would only be 5 000 which is not enough to live on. Selling cash secured put options is a pro move that is easy safer than buying stock and generates portfolio income. Control your emotions stop listening to amateurs about options and learn.