How to generate consistent income
trading options. This is a beginners
tutorial on options trading strategies
my name is David Jaffee with BestStockStrategy.com
and you can go to BestStockStrategy.com
enter your email and
receive $400 worth of free training. A
lot of students tell me that that
though I graduated from an Ivy League
university I worked in Investment
Banking for five years I've completed
and worked on over five or ten billion
dollars worth of transactions the only
way that I would be profitable is by
selling put options so I try to make
things as incredibly simple for you so
that you can learn and I'm going to tell
you how to generate consistent money by
selling options
alright here's pretty much the strategy
in a nutshell
okay we have Facebook that right now is
trading at 175 all right each trading
range over the past few weeks has pretty
much been around 182 to around a hundred
and seventy I know that it fell below
170 but for the most part you know
what's been trading in this range so
what I would do is I basically wait
until Facebook falls to around 173 or
you know 172 then I would sell a put
option with a strike price of around 150
seven dollars and fifty cents or 158
dollars I would collect a dollar or a
dollar 20 in premium and I would choose
an expiration date that's around four to
six weeks out that's pretty much it and
one of the great things is you get paid
from making good decisions and the way
only have positions on and around six
securities at all times
I have positions on in Facebook Amazon
Boeing Lockheed Martin a gaming stock
like a TBI or ttwo and then usually a
I only treat six securities I ignore
everything else one of my students tells
me to look at Netflix or in video or
Tesla
I don't even I'm just like hey it's not
on my watch list I don't pay attention
to it this is the most efficient way to
earn consistent monthly income in the
stock market less is more if you want to
make a lot of money and I made 2,500
and your informational sources and make
sure that you are extremely disciplined
and you become an expert in an extremely
deep strategy where you know everything
about it
and that's what I teach people you can
time trade alerts and around 80 percent
of my profits or me by selling put
option so I'll give you another example
Lockheed Martin ended its trading at
around three hundred and twenty dollars
all right I know that earlier this year
was trading around 360 right now is
trading at around 320 it's trading range
over the past few weeks has been at a
low at around 310 I know that it's
traded to around 3 or 5 or even around
300 I believe and a high I think it only
got up to around 325
alright for me I'm gonna wait until
Lockheed falls to around 312 why do I
choose that number just because I feel
comfortable I know what likely has been
trading at over the
last few weeks then when it traced the
312 I will sell a 295 put option with an
expiration of six weeks in the future
and I'm going to collect around two
dollars and 20 cents I'm gonna sell a
naked put option I'm not gonna use the
vertical because a vertical put option
is going to motivate me to sell too many
contracts to compensate for the lost
income that I'm paying to buy that lower
price put option + when I sell a naked
put options it's much easier for me to
manage and roll that position forward in
the worst case scenario where that
option ends up getting challenged so I
usually only trade naked options the
only time I'll use vertical options is
on a super expensive stock where I want
to manage my buying power reduction in
example will be Amazon if I'm gonna sell
a $1700 put I'm also gonna buy like the
1550 put that way I don't have seventeen
hundred dollars worth of risk I'm not
concerned about the risk aspect I'm more
concerned about the buying power
reduction so I don't want to reduce my
buying power by twenty percent of
seventeen hundred dollars for every
contract that I sell which would mean
that you know every contract is
seventeen thousand dollars for every
naked option that I sell on Amazon I
don't want to reduce it by thirty four
hundred dollars I'd much rather sell a
vertical turning into a hundred and
fifty dollars stock and then reduce that
buying power reduction from seventeen
hundred all the way down to three
hundred all right because remember
options it's only 20% of your buying
power reduction whereas for stops it's
50%
so in this Lockheed Martin example when
they collect two dollars and 20 cents a
share that means for every contract that
I sell them in and collect $220 $220
that trade is going to be profitable
around 95 to 98% of the time and if it's
not profitable I'm just going to roll
the position sorry that's my toddler I
think his mother just came home but in
any case that's how you make money and
generate consistent income in the stock
market this is David Jaffe with bestop's
rising calm if you have interest then
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