This is a great video without any hype. It includes the full option selling process from stock selection, strike price strategy and how to recover a contract that is not going your way. Thank you for a very helpful lesson in selling Puts.
I've been watching other youtubers and I feel like you are teach the options the best and make it more clear. I want to start trading but i haven't pull the trigger yet...I'm ready to do it!
Thanks for the kind words! Why don’t you join our discord? We’re a fun group and lots are just getting started! In the meantime, I highly recommend paper trading until you’re 1000000% certain about the trade!!
This is a new concept for me, and I can tell you that after watching a few other videos on the subject first, this is the best video I've found. Very clear and concise. Thank you!
Very clear. He talks without the hype. He very well knows what he is talking about. You can tell he is way apart from many you tubers who claim to be earnings millions but they are not convincing at all. I am not from the US and would like to start small on options. Due to limitations from where I am from, I invest on crypto instead although I know there's so much opportunity in options trading. Thank you and more power
I've been selling puts (and covered calls) since 2015. For the last three years I'm up 113.88%, vs 22.64, 15.71 and 14.17 for the S&P, NASDAQ and DOW respectively. Mostly self-taught. I follow IBD Weekly, Cramer, CNBC for ideas and look for very good companies where the strike price is 30% or more under the stock's current price and the premium is at least a dollar, (less if the stock is under about $70.00). This way, delta and the rest of the Greeks are really not my concern. This IS the most fun you can have with your clothes on or off. 🙃🙃🙃
I have the same strategy, except that your 30% cushion is way to conservative. 20% is more than enough margin of safety. How far out is your expiration? Mine is monthly. I'm killing it.
@@RickOrford Yes, sometimes I'm below 30%, even 20%. When I first started out, I was strict with myself on 30%, but like learning anything and doing it over and over, you get better and better, and your skills grow and you evolve. I find it a very creative endeavor. My trades depend on so many factors and I'm constantly figuring out new ways and see new opportunities. My contract expirations vary. There is simply no fast rule on that. I generally go out 30-45 days, but I have made trades for one day to just over one year. The market is just so dynamic, though good math keeps you grounded. I'm comfortable leaving some money on the table and taking the safer bet. And yes, occasionally I make a bad trade, though if it's a good company (which is what I trade) then I wait until it recovers. The good thing about a bad trade is that it keeps one humble.
Rick, very good video. I just found you. Thanks for the clarification on negative deltas for puts. Question: if selling CCs, option reaches strike price then dips below, can you buy to close? Can u close if not yet assigned but option Reaches strike?
Thanks for the kind words- and for watching! Yes, if you sell any option (including covered calls) you can always “buy to close” to close out the position.
@brotherleo4090 By closing early you lower you profits per trade, but you can do more trades per year and have more profits in the long term. It makes sense when the conditions are right. Not saying you need to close every trade early.
@@RickOrford Thank you for taking time to reply, on may 30 sold one contract strike price 177.5 delta was .2783, I waited till June 4 made sure that trade was clear, then I made 2 contracts strike 165, I am sure it will expire ok tomorrow. I sold one put of NVDA of June21 strike 1125 , how do I protect the loss? I am lucky and happy to attend Rick Trading University everyday, you are the best professor!
@@terifong9816 Ha! You are too kind. Easiest way to protect yourself from a loss on a CSP is to buy a lower strike put. This means you'll turn your trade into a bull put. It will cost you some premium, but, you might sleep better. Good luck! Also, here's a little extra video I think you might like: ua-cam.com/video/DD7a72NB3iw/v-deo.html
I'm in the Ed Seikota way to look for the underlying stock and Juila Spina way to analyze the option to sell/ I agree 85% with you... Sought your video I confirmed my insights. Congratulations.
Rick, your videos are extremely clear and informative. I have been selling cash-secured puts and covered calls as a passive income strategy for around 4 years now. However, I have stuck with a basket of a few stocks (for easy of analysis and timing), and used SMAs (I have these set at 50, 100, 150, 200) to time entry along with the stochastics and delta. With this I have been trying to time my entry in order to sell closer at-the-money options. Eg: when the stock is on an uptrend (SMAs are upwards) I wait for the stock price to reach the 50-SMA to place the put sell. I want to hear your views on this in the context of selling closer to at-the-money. Thank you for sharing these tools like the screener (i.e. options samurai, etc) and going more in-depth into Delta and probability. I am looking forward now to start utilizing these tools and indicators into my strategy.
I've been successfully (profitably!) selling put options for years. Recently I was seriously burned by the strategy. $TSLA was trading in the $240s and I wrote 18 monthly contracts at a strike price of $220. At maturity $TSLA had dropped below my strike and I was assigned the stock. Now $TSLA is trading in the low $170s. Writing covered calls six months out at my original strike price. But I;m sitting on massive albeit unrealiized losses. Hoping that $TSLA will recover to $220 by end of 2024.
Can you you do a video on straight selling naked puts vs selling vertical or butterfly puts etc and how it can drastically reduce risk (drawbacks if any on rewards etc)?
The easiest screener I know is Samurai: rickorford.com/samurai - however, my favorite one which also costs less is rickorford.com/barchart Barchart has a touch more of a learning curve but has 100x more features, including research for stocks as well.
When the overall market is down trending I tight the deltas to around 15 or less and get content with less profitability. However, it is possible to perform around 1% monthly. A way to mitigate the downfall risk is to sell verticals or diagonals, exceptionally.
Got some great insights from the video , commendable work Rick. I had a question on selling put spreads - How can I reduce the risk of getting assigned on the short put option ? From a probability perspective, Is it true that there are higher chances of short put option getting assigned only if it gets deep in the money or too close to expiration (3-4 DTE) ? if the option is OOM it won't get assigned generally since the put option buyer will have to face a loss on the other side? Can we reduce our risk by mitigating these two conditions by selling before the last week and closing short option if we the short put option (of the spread) starts getting too deep in the money ?
Thanks for the kind words! In terms of selling spreads, it’s better to sell those with a high chance of profitability. You can find these using a scanner like rickorford.com/samurai That said, all ITM short options have the risk of assignment. Here’s how to reduce the risk: ua-cam.com/video/vFf1Ty6yFhE/v-deo.html As for DTE- this will play into risk- but again, so does the premium- so you’ll need to balance it! Hope this helps! Ps: watch out for my next video- I’ll be covering how to sell puts with a small account!
How do u hedge or pivot in a down market , the wheel strategy would not be ideal because of stock depreciation, what strategy would one use during bear market ? Thx u
In a down market, volatility will likely be higher. You can close your trade (at a loss) then sell another put at a lower strike. What you collect on the lower strike should negate the loss (at least partially). The wheel strategy means doing that until the option expires unassigned.
To make some money on Sell/Put you need to have min $50-$100K sitting around first, because you need to pay collateral $ for the time of expiration :D Selling puts with few thousands $ in the bank won't do anything maybe $1-3 in a month :D
Good point! True, some brokerages require a certain minimum, but it’s not always true. IB for example does not. Selling a pit requires that you are able to buy 100 of the underlying. If the stock is $100, then you’ll need at least $10k on a cash-secured basis, less if using margin. Otherwise, investors can trade credit spreads using puts (or calls) and require far less capital!
@@RickOrford Trading spreads requires level 3 approval and they don't always come out to your expectations. Selling puts on cheap stocks doesn't offer much a $1 or so. You need to have $100K to bet on decent sell/put at lower strikes.Just be carefull people ! You can lose lots of $ very quick.
I have liked selling options at earnings if a pretty regular “up” pattern is before (or after) earnings date. What is a good source to help you identify these patterns?
Barchart / rickorford.com/barchart can be a very good resource to send notifications of certain searches. However, I think you’ll find Samurai a better tool… rickorford.com/samurai as it gives you current opportunities!
In order to get out the shares, does the stock price have to be below the strike price on the expiration date, or can it be before that date? What is the proper ratio of premium-to-money being tied up to cover the put? Tx
Hi! Not sure what you mean by “get out the shares”. As for a “proper ratio” - there isn’t any that I know. I prefer to consider the chances the option will expire out of the money (worthless) and decide from there. Alternatively, you could look at the premium as an annualized % of the “risk capital” - but, that would add to complexity, would limit income, and potentially ignore risk.
Hi Rick, thanks for the video. If my strike price is somewhere 20% below the stock price with a probability of 85% it will expire out of the money....is there any possibility I will still get assigned for the contract based on historical records?
Remember, assignment happens if the investor requests it (and they could, in theory, request it for any reason). That said, out of the money options nearly never get assigned. And if an investor did happen to exercise an out of the money put- it would have been in error and you’d more than likely be in a profit position anyway. Let me know if that helps!
Hi- yep! I use Options Samurai - rickorford.com/samurai I like it because it scans the market and give me trade ideas that meet my parameters (ie 80%+ chance of profit). Check it out- you get two weeks free with my link… let me know how it goes!
I would love to own MSFT stock but they are too expensive to buy. Would it make sense to sell put at strike price of $100 that expires in Dec2026. The premium is still pretty decent.
I own 300 shares of Mstr, I sold 3 June 2900 calls for $286 bought them back a week later at $72, made $64k, now I’m thinking of selling puts, which should I consider?
The goal of selling puts is to do it on 1) a stock you’d like to own, and 2) for the option to expire worthless. Which one you chose depends on your own unique goals!
@RickOrford when you do a buy back, what is that cost compared to the original premium? Let's say I strike at 80 and current price is 100, premium 1. Price drops to 85 and I want to buy to close. What will I be paying then? Is it directly related to the original 1? Or is it purely based on the current volatility?
@@RickOrford I think a video on the specifics of buybacks and strategies would be just awesome. I can't see how it's done unless I do it myself, and that's scary!
Hard to say. You’d have to check the premium when you’re ready to buy back the option. If it’s less than you originally got, then you can crystallize your profit!
Great question, and thanks for asking! Yes, you can use a stock (or portfolio) you already own as collateral to sell a put. However, doing so would require using margin. So, if the "stock you already own" moves down in price, so will your available margin. And if you run out of margin, you'll get a margin call that could lead to a cash call, or worse, an automatic liquidation. That's why cash is king when it comes to selling put options!
@jonboyfutch8081 what about? Selling puts on the SPY, for example, is becoming very popular again as it’s been in a bull market since the bottom of late 2022. The fundamentals of selecting the right put, however, don’t change. Balance the expiration date with the strike price, look at delta, and figure out what works best for you!
I've been doing the wheel strategy for a while. Recently, I've been selling CSP on QQQ weekly and biweekly. Much better prem than SPY. These are much more predictable than single company stocks.
I only use options to get or out of positions. Nothing fancy…….selling puts to get in and selling calls to get out of a positions. Sure beats placing limit orders then waiting for it to hit the limit price…..lol.
Would like to see more on your screener and strategies and parameters you look for to find good high premium CSP setups on quality stocks “you don’t mind owning.”
Sure- I use Options Samurai (rickorford.com/samurai) to find CSPs and Bull put spreads. It scans the market, tells me my Max loss, chances of profitability etc. I’ll be recording a video about it soon- in the mean time, you can create a free account using the link I provided and give it a try!
I wanted to ask a professional for some advice. About SoFi. I have an extremely high risk profile and I'm comfortable with losing my investment. I have been selling naked puts for a while. I am considering selling the $20 put for 2026. Which will allow me to make a 700% if SoFi ends above $20 in 2026. My breakeven will be around the current share price. I see the $4 TBV per share as a bottom for the stock. The risk/reward is really attractive. I'm doubting whether I should sell the $20 put for 2026 or the $5 put which only allows me to make 2x my original investment in that time but the breakeven is at $4.25 a share instead of the current share price for the $20 puts. What do you think? I'm extremely bullish. Oh yeah and I want to use the money I get to buy ITM calls expiring in 2026 as well.
@@RickOrford I want to leverage my return and increase my risk. Willing to lose everything, I’m just greedy for a higher return because I think the chances are on my side.
Tesla is my favorite stock but April was BRUTAL for Put options and was assigned at $144 couldn’t believe it! But then again, I️ saw opportunity so I️ bought 4 contracts and now have 400 shares. Well, after the China deal last week, stock surged back to the $190’s and I️ CASHED OUT 300! Now it’s dropping again?! I️ believe in Tesla and Elon and believe it will be a $500+ stock one day. I️ am now back in the Put strategy. But I️ did a Put credit spread instead. But with Robinhood, you can’t roll to save from loss. So what do you suggest, straight Selling Put option or Sell Put/Buy Put ($1-$2 spread difference)?
Oh how I feel you pain!! Tesla was brutal in April, though, if you have 400 shares @ $144, there should be a ~$40/share profit as of yesterdays close. Not sure if Robinhood allows bracket orders… you’d have to ask. IB certainly does. Finally, I recommend the following- as it answers your question more in depth 💥 Exit Strategies In Options Trading | Secure Your Profits & Limit Losses ua-cam.com/video/cDt5LFXjq8Q/v-deo.html
So-so video. An outline of how selling puts work, but not a specific STRATEGY. You're asking your viewers to give you feedback. I know and have outlined EXACTLY how to do it below.
🔥 Join me on Discord: rickorford.com/discord
I have never sold any put options but I'm educating myself on it to start
This is a great video without any hype. It includes the full option selling process from stock selection, strike price strategy and how to recover a contract that is not going your way. Thank you for a very helpful lesson in selling Puts.
Thanks for the kind words!!!
This is the only video you need to start selling options! Thank You Rick!
You’re too kind!
This is one of the best videos I have seen on describing selling out options. Thank you for your work
Thanks for the kind words!
I've been watching other youtubers and I feel like you are teach the options the best and make it more clear. I want to start trading but i haven't pull the trigger yet...I'm ready to do it!
Thanks for the kind words! Why don’t you join our discord? We’re a fun group and lots are just getting started! In the meantime, I highly recommend paper trading until you’re 1000000% certain about the trade!!
Never sold puts but am planning on selling PLTR puts and eventually using the wheel strategy.
Cool. Keep us posted!
This is a new concept for me, and I can tell you that after watching a few other videos on the subject first, this is the best video I've found. Very clear and concise. Thank you!
Thanks for the kind words!
I appreciate your speaking slowly and covering important scenarios
Very kind of you to say, thanks!
Great video. Very easy read. Helped me a lot to understand. Thanks.
thanks for the kind words!! Check out this next: m.ua-cam.com/video/3Lfr29cfKvI/v-deo.html
Great education! It’s so clear for the beginner to understand!!
Thanks! And for more, check out my discord!!
Very clear. He talks without the hype. He very well knows what he is talking about. You can tell he is way apart from many you tubers who claim to be earnings millions but they are not convincing at all.
I am not from the US and would like to start small on options. Due to limitations from where I am from, I invest on crypto instead although I know there's so much opportunity in options trading.
Thank you and more power
Thanks for the kind words. You’re right, I don’t need to show irrelevant million dollar bank accounts.
Informative video. FYI: I usually BTC (Buy to Close) when I’ve made 50% of my money…the market can quickly turn against you.
Conservative, and solid!! Do you set up the BTC trade at the onset, or do you buy it back “when you like”?
Yes, last year I started selling puts. In one year I doubled my portfolio.
Can you give us some more information? Size of portfolio, deltas and days to expiration. Amount you paid in taxes?
@Gespense you’d need to discuss it with a financial advisor, and accountant!
What tickers were you selling puts on?
I've been selling puts (and covered calls) since 2015. For the last three years I'm up 113.88%, vs 22.64, 15.71 and 14.17 for the S&P, NASDAQ and DOW respectively. Mostly self-taught. I follow IBD Weekly, Cramer, CNBC for ideas and look for very good companies where the strike price is 30% or more under the stock's current price and the premium is at least a dollar, (less if the stock is under about $70.00). This way, delta and the rest of the Greeks are really not my concern. This IS the most fun you can have with your clothes on or off. 🙃🙃🙃
Interesting strategy!
I have the same strategy, except that your 30% cushion is way to conservative. 20% is more than enough margin of safety. How far out is your expiration? Mine is monthly. I'm killing it.
I guess it comes down to comfort! 20% works for many as well!
@@RickOrford
Yes, sometimes I'm below 30%, even 20%. When I first started out, I was strict with myself on 30%, but like learning anything and doing it over and over, you get better and better, and your skills grow and you evolve. I find it a very creative endeavor. My trades depend on so many factors and I'm constantly figuring out new ways and see new opportunities. My contract expirations vary. There is simply no fast rule on that. I generally go out 30-45 days, but I have made trades for one day to just over one year. The market is just so dynamic, though good math keeps you grounded. I'm comfortable leaving some money on the table and taking the safer bet. And yes, occasionally I make a bad trade, though if it's a good company (which is what I trade) then I wait until it recovers. The good thing about a bad trade is that it keeps one humble.
You should clarify that the bid price is the buyer, unless it is a put, then it is the seller.
Rick, very good video. I just found you. Thanks for the clarification on negative deltas for puts. Question: if selling CCs, option reaches strike price then dips below, can you buy to close? Can u close if not yet assigned but option Reaches strike?
Thanks for the kind words- and for watching! Yes, if you sell any option (including covered calls) you can always “buy to close” to close out the position.
Thank you. Wish I had known this 10 days ago.
@brotherleo4090 By closing early you lower you profits per trade, but you can do more trades per year and have more profits in the long term. It makes sense when the conditions are right. Not saying you need to close every trade early.
The first selling put of Tsla after watching your video, I made a little money, thank you!
Nice! What option did you sell?
@@RickOrford Thank you for taking time to reply, on may 30 sold one contract strike price 177.5 delta was .2783, I waited till June 4 made sure that trade was clear, then I made 2 contracts strike 165, I am sure it will expire ok tomorrow. I sold one put of NVDA of June21 strike 1125 , how do I protect the loss? I am lucky and happy to attend Rick Trading University everyday, you are the best professor!
@@terifong9816 Ha! You are too kind. Easiest way to protect yourself from a loss on a CSP is to buy a lower strike put. This means you'll turn your trade into a bull put. It will cost you some premium, but, you might sleep better. Good luck! Also, here's a little extra video I think you might like: ua-cam.com/video/DD7a72NB3iw/v-deo.html
Appreciate!
I'm in the Ed Seikota way to look for the underlying stock and Juila Spina way to analyze the option to sell/ I agree 85% with you... Sought your video I confirmed my insights. Congratulations.
Rick, your videos are extremely clear and informative.
I have been selling cash-secured puts and covered calls as a passive income strategy for around 4 years now. However, I have stuck with a basket of a few stocks (for easy of analysis and timing), and used SMAs (I have these set at 50, 100, 150, 200) to time entry along with the stochastics and delta. With this I have been trying to time my entry in order to sell closer at-the-money options.
Eg: when the stock is on an uptrend (SMAs are upwards) I wait for the stock price to reach the 50-SMA to place the put sell. I want to hear your views on this in the context of selling closer to at-the-money.
Thank you for sharing these tools like the screener (i.e. options samurai, etc) and going more in-depth into Delta and probability. I am looking forward now to start utilizing these tools and indicators into my strategy.
Excellent plan- focusing on a basket of stocks will sure make your CSP entry points easier! Thanks for watching:)
I've been successfully (profitably!) selling put options for years. Recently I was seriously burned by the strategy. $TSLA was trading in the $240s and I wrote 18 monthly contracts at a strike price of $220. At maturity $TSLA had dropped below my strike and I was assigned the stock. Now $TSLA is trading in the low $170s. Writing covered calls six months out at my original strike price. But I;m sitting on massive albeit unrealiized losses. Hoping that $TSLA will recover to $220 by end of 2024.
Ouch! I'm keeping the contracts at 1 week to 6 weeks. Good luck making it back!
Thanks! Do you personally think $TSLA will get back to the $220s?@@jonschlottig9584
How long doing it successfully? How much did you make annually selling puts? Thx
Assigned $TSLA at 225, currently selling strangles to lower my cost basis. Risky rescue mission. Good luck
5 Years. 1st year $230K, 2nd year $280K, 3rd year $320K, last year $410K and this year I project $450K@@JJ-rg7yp
Can you you do a video on straight selling naked puts vs selling vertical or butterfly puts etc and how it can drastically reduce risk (drawbacks if any on rewards etc)?
5 Essential Options Trading Hedging Strategies for Beginners to Safeguard Your Portfolio!
ua-cam.com/video/6cF5QXxziq4/v-deo.html
Do u use T.a and researching financials before selling a put .. if so , what’s the criteria , what screeners are best to use
Thxs
The easiest screener I know is Samurai: rickorford.com/samurai - however, my favorite one which also costs less is rickorford.com/barchart Barchart has a touch more of a learning curve but has 100x more features, including research for stocks as well.
I rarely let my CSP and CC expire worthless, I roll them as soon as it gets to at least 80% profit.
Excellent strategy!!!!!
I would have chosen the 4.70 put at 145 at -0.23. That's a lot more premium than 140 at 3.50 premium with only a 3 percent worse win rate.
I am starting my learning of how to start. Thanks for the informative content.
Thanks for watching! Let us know if you have any questions!!
Can you do a video on Covered Call vs Sell Puts, pros/cons, which one is for what type of investors, using examples
Got it. Covered call vs CSP. Will do. Thanks for the tip!
When the overall market is down trending I tight the deltas to around 15 or less and get content with less profitability. However, it is possible to perform around 1% monthly. A way to mitigate the downfall risk is to sell verticals or diagonals, exceptionally.
100% correct. Having a good idea of the markets direction, one can enter into a strategy that aligns with it.
I don't see link for covered calls noted in video. Thank you!
Hurm. At which minute:second?
I tried to sell covered call for NVDA, but the premium is so low.
Selling covered calls isn’t a “get Rich quick” scheme:) a low premium means the option is OTM. The further OTM, the lower the premium!
Got some great insights from the video , commendable work Rick. I had a question on selling put spreads - How can I reduce the risk of getting assigned on the short put option ? From a probability perspective, Is it true that there are higher chances of short put option getting assigned only if it gets deep in the money or too close to expiration (3-4 DTE) ? if the option is OOM it won't get assigned generally since the put option buyer will have to face a loss on the other side? Can we reduce our risk by mitigating these two conditions by selling before the last week and closing short option if we the short put option (of the spread) starts getting too deep in the money ?
Thanks for the kind words! In terms of selling spreads, it’s better to sell those with a high chance of profitability. You can find these using a scanner like rickorford.com/samurai
That said, all ITM short options have the risk of assignment. Here’s how to reduce the risk: ua-cam.com/video/vFf1Ty6yFhE/v-deo.html
As for DTE- this will play into risk- but again, so does the premium- so you’ll need to balance it!
Hope this helps!
Ps: watch out for my next video- I’ll be covering how to sell puts with a small account!
How do u hedge or pivot in a down market , the wheel strategy would not be ideal because of stock depreciation, what strategy would one use during bear market ?
Thx u
In a down market, volatility will likely be higher. You can close your trade (at a loss) then sell another put at a lower strike. What you collect on the lower strike should negate the loss (at least partially). The wheel strategy means doing that until the option expires unassigned.
Its my first encounter with put option.
Let us know how it goes!
To make some money on Sell/Put you need to have min $50-$100K sitting around first, because you need to pay collateral $ for the time of expiration :D Selling puts with few thousands $ in the bank won't do anything maybe $1-3 in a month :D
Good point! True, some brokerages require a certain minimum, but it’s not always true. IB for example does not. Selling a pit requires that you are able to buy 100 of the underlying. If the stock is $100, then you’ll need at least $10k on a cash-secured basis, less if using margin. Otherwise, investors can trade credit spreads using puts (or calls) and require far less capital!
@@RickOrford Trading spreads requires level 3 approval and they don't always come out to your expectations. Selling puts on cheap stocks doesn't offer much a $1 or so. You need to have $100K to bet on decent sell/put at lower strikes.Just be carefull people ! You can lose lots of $ very quick.
I have liked selling options at earnings if a pretty regular “up” pattern is before (or after) earnings date. What is a good source to help you identify these patterns?
Barchart / rickorford.com/barchart can be a very good resource to send notifications of certain searches. However, I think you’ll find Samurai a better tool… rickorford.com/samurai as it gives you current opportunities!
In order to get out the shares, does the stock price have to be below the strike price on the expiration date, or can it be before that date?
What is the proper ratio of premium-to-money being tied up to cover the put?
Tx
Hi! Not sure what you mean by “get out the shares”. As for a “proper ratio” - there isn’t any that I know. I prefer to consider the chances the option will expire out of the money (worthless) and decide from there. Alternatively, you could look at the premium as an annualized % of the “risk capital” - but, that would add to complexity, would limit income, and potentially ignore risk.
You get assigned the shares if it hits your strike price or below that is why you only sell puts on stocks you don't mind owning
I've got 109 shares of a stock I love. Should I consider using that to make income
Why not! You could potentially sell 1 covered call on it…
Hi Rick, thanks for the video. If my strike price is somewhere 20% below the stock price with a probability of 85% it will expire out of the money....is there any possibility I will still get assigned for the contract based on historical records?
Remember, assignment happens if the investor requests it (and they could, in theory, request it for any reason). That said, out of the money options nearly never get assigned.
And if an investor did happen to exercise an out of the money put- it would have been in error and you’d more than likely be in a profit position anyway.
Let me know if that helps!
Can you give us a good stock screener?
Hi- yep! I use Options Samurai - rickorford.com/samurai I like it because it scans the market and give me trade ideas that meet my parameters (ie 80%+ chance of profit). Check it out- you get two weeks free with my link… let me know how it goes!
yes
I would love to own MSFT stock but they are too expensive to buy. Would it make sense to sell put at strike price of $100 that expires in Dec2026. The premium is still pretty decent.
If you’re happy tying up 10k through 12/26 in exchange for the premium, I’d say the trade will likely do well!
I own 300 shares of Mstr, I sold 3 June 2900 calls for $286 bought them back a week later at $72, made $64k, now I’m thinking of selling puts, which should I consider?
My avg cost was $512, now $299.
The goal of selling puts is to do it on 1) a stock you’d like to own, and 2) for the option to expire worthless. Which one you chose depends on your own unique goals!
I’m new to this strategy.
When selling put option, the premium collected will be credited to individual broker account. Is it correct ?
Yep! The $$ premium will go to your own brokerage account, instantly.
@@RickOrford Noted. Thanks for the reply.
I've been learning how to do this, very interested to hear what you have to say!!
Cool! Stay tuned for my next video!
@RickOrford when you do a buy back, what is that cost compared to the original premium? Let's say I strike at 80 and current price is 100, premium 1. Price drops to 85 and I want to buy to close. What will I be paying then? Is it directly related to the original 1? Or is it purely based on the current volatility?
@@RickOrford I think a video on the specifics of buybacks and strategies would be just awesome. I can't see how it's done unless I do it myself, and that's scary!
Totally agree. Working on it!!!
Hard to say. You’d have to check the premium when you’re ready to buy back the option. If it’s less than you originally got, then you can crystallize your profit!
Hey, Rick can I use the stock I already own as collateral to sell put of another stock?
Great question, and thanks for asking! Yes, you can use a stock (or portfolio) you already own as collateral to sell a put. However, doing so would require using margin. So, if the "stock you already own" moves down in price, so will your available margin. And if you run out of margin, you'll get a margin call that could lead to a cash call, or worse, an automatic liquidation. That's why cash is king when it comes to selling put options!
I perfer dividend stocks but have a few non dividend stock as well
I love dividend stocks as well ;-)
I never sell an option unless the delta is .25 or less
>75% chance of expiring worthless is solid!
What about long term stocks with long option chains like spy or something else?
@jonboyfutch8081 what about? Selling puts on the SPY, for example, is becoming very popular again as it’s been in a bull market since the bottom of late 2022. The fundamentals of selecting the right put, however, don’t change. Balance the expiration date with the strike price, look at delta, and figure out what works best for you!
I've been doing the wheel strategy for a while. Recently, I've been selling CSP on QQQ weekly and biweekly. Much better prem than SPY. These are much more predictable than single company stocks.
how to find good stock that gives decent premium for selling put
Easy- a screener!! Skip ahead to that section of then video! Then check rickorford.com/samurai
I only use options to get or out of positions. Nothing fancy…….selling puts to get in and selling calls to get out of a positions. Sure beats placing limit orders then waiting for it to hit the limit price…..lol.
Very smart way also get paid into a position! Keep it up!! 🚀
Would like to see more on your screener and strategies and parameters you look for to find good high premium CSP setups on quality stocks “you don’t mind owning.”
Sure- I use Options Samurai (rickorford.com/samurai) to find CSPs and Bull put spreads. It scans the market, tells me my Max loss, chances of profitability etc.
I’ll be recording a video about it soon- in the mean time, you can create a free account using the link I provided and give it a try!
I wanted to ask a professional for some advice. About SoFi. I have an extremely high risk profile and I'm comfortable with losing my investment. I have been selling naked puts for a while. I am considering selling the $20 put for 2026. Which will allow me to make a 700% if SoFi ends above $20 in 2026. My breakeven will be around the current share price. I see the $4 TBV per share as a bottom for the stock. The risk/reward is really attractive. I'm doubting whether I should sell the $20 put for 2026 or the $5 put which only allows me to make 2x my original investment in that time but the breakeven is at $4.25 a share instead of the current share price for the $20 puts. What do you think? I'm extremely bullish. Oh yeah and I want to use the money I get to buy ITM calls expiring in 2026 as well.
If you’re extremely bullish of SOFI, why not buy the stock and hold?
Btw: don’t forget to check out my discord for more!!
@@RickOrford I want to leverage my return and increase my risk. Willing to lose everything, I’m just greedy for a higher return because I think the chances are on my side.
never sold a Put Option.
Do you have a target? What’s your favorite stock?
Tesla is my favorite stock but April was BRUTAL for Put options and was assigned at $144 couldn’t believe it! But then again, I️ saw opportunity so I️ bought 4 contracts and now have 400 shares. Well, after the China deal last week, stock surged back to the $190’s and I️ CASHED OUT 300! Now it’s dropping again?! I️ believe in Tesla and Elon and believe it will be a $500+ stock one day. I️ am now back in the Put strategy. But I️ did a Put credit spread instead. But with Robinhood, you can’t roll to save from loss. So what do you suggest, straight Selling Put option or Sell Put/Buy Put ($1-$2 spread difference)?
Oh how I feel you pain!! Tesla was brutal in April, though, if you have 400 shares @ $144, there should be a ~$40/share profit as of yesterdays close.
Not sure if Robinhood allows bracket orders… you’d have to ask. IB certainly does.
Finally, I recommend the following- as it answers your question more in depth 💥 Exit Strategies In Options Trading | Secure Your Profits & Limit Losses
ua-cam.com/video/cDt5LFXjq8Q/v-deo.html
I never sell put option
Do you want to?
So-so video. An outline of how selling puts work, but not a specific STRATEGY. You're asking your viewers to give you feedback. I know and have outlined EXACTLY how to do it below.
is it me, or he looks a bit like Mark Zuckerburg?
Hahah, I’ll take it??
Find a stock that is running sideways.