With the goal of living off dividends i can increase my income and reinvestable capital by successfully writing put options for income.
Selling stock options for a living.
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.
But let s say we had a 100 000 portfolio.
Something to consider is how long you plan to hold the option for.
Pitfalls of selling stock options like naked puts.
Selling 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.
Unlike the traditional buyer who needs a big one way move sellers are uniquely positioned.
Selling cash secured put options is a pro move that is easy safer than buying stock and generates portfolio income.
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.
Control your emotions stop listening to amateurs about options and learn.
When performed on a selective basis selling premium can prove successful.
Stock enthusiasts commonly wonder whether it s possible to make a living trading stocks.
Selling options on slumping stocks is only part of the fun.
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.
Writing puts for income offers the best combination of risk reward.
I ll highlight why selling weekly put options is the best weekly option trading strategy to learn.
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.