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welcome to looking at the markets with
David Moadel selling options especially
if they're out-of-the-money short-term
options such as the weekly options with
only a few days left until expiration to
me that's almost like legally Legally
taking money from people you're taking
money out of the accounts of well
gamblers are speculators and I mean you
have to be careful with it make sure
that you're always hedging your
positions and limiting your potential
losses and using small position sizes
always ok so you have to be careful with
these but you know I I kind of look at
it as if you're doing it right then it's
almost like getting free money from
people
let's look at a few examples this is
from februari 15 2017 in the morning
Netflix was trading at
141 and 92 sense and we're looking at
weekly options here that expire in a few
days
alright so if you had sold this morning
and out-of-the-money weekly 140 put
option you would have you could've sold
it sold them for about fifty dollars per
contract by the end of the day you could
have bought them back for around twenty
eight dollars per contract for a profit
there
ok now that's the puts em IQ you might
be thinking well what about the calls
you would have lost money selling those
right well let's take a look that
morning if you had sold the 144
out-of-the-money weekly calls you could
solve them for $52 for contract by the
by the end of the day you could have
bought them back for full around forty
dollars for contract still for a profit
even though netflix stock went up that
day
so whether you saw the calls or the puts
you would have profited
let's take a look at amazon as it as
another example that same day in the
morning trading at eight thirty eight
and sixty-eight cents per share if you
had sold the weekly 830 out-of-the-money
put options you could have sold them for
around a hundred and sixty three dollars
per contract and by the end of the day
you could've bought them back for $65
for contract for a nice profit there
well what about the call options ok that
morning you could have sold the 850
out-of-the-money weekly option weekly
call options for a hundred and
twenty-nine dollars per contract and by
the end of the day you could have sold
them 426 dollars for contract not a lot
of profit there but you would have at
least broken even you wouldn't have lost
any money and so you would have been
fine
ok so whether you had sold the put
options for the call options you know
you would have either profited or at
least broken even so you know you would
have done fine let's take a look at
Apple that same day
the morning was trading at 135 and
sixty-seven cents that morning if you
had sold weekly out-of-the-money 133 put
options you could have sold them for
sixteen dollars for contract by the end
of the day you could have blocked them
back for nine dollars for contract for a
decent profit there but what about the
call options when you have lost money in
that case let's see that morning you
could have sold the 138th
out-of-the-money weekly call options for
21 dollars per contract and by the end
of the day you could have bought them
back for eight dollars per contract for
a nice profit and apple had gone up
apple stock has gone up that day so
again here's another case we could have
sold the you could have sold either be
put options or the call options and made
money so these these are just a few
examples and i'm not saying that every
option behaves like this you really have
to be careful I'm not telling you what
to do what to buy or what to sell or how
to trade but these are just examples of
how
you know these out-of-the-money
short-term put incall options can be
sold and you it's almost like getting
free money
ok so if you like this video if it
inspires you to try a different trading
strategy then please give this video a
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plan or you want to learn more about
selling options how to do it the right
way you know how to head your position
how to do it safely
you can email me anytime at David Modell
active gmail.com
thank you so much for watching and
listening and i'll talk to you again
soon
thank you for watching
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