Hey traders,
Just a reminder that I'm out this week…
But this week I've been sending you a couple of emails that "string together" some of my greatest hits.
My goal was to connect the dots, so to speak, and give you solid building blocks for creating your own income strategy.
So without further ado…
- On Tuesday we talked about shifting your mindset from buying options to selling options.
- Then yesterday, we talked about how to find the best, strongest trending stocks against which you can collect premium. (this is what we call the money you collect for selling an option)
Today I'm going to give you the framework for a great trade.
Remember, the idea with income trading is to have more consistent wins.
Income trading isn't going to give you huge 100% winners.
But if you do it right, you could end up with a track record like I have in my Weekly Options Profit program, where we've won over 96% of our trades.
Ok so here goes.
Once you've got your strongly trending stock, from there you just sell an option about 7-10% out of the money.
I've done this on both monthly options that expire 30-40 days into the future, as well as on weekly options that expire at the end of the week.
I talk more about it in this update from a few weeks ago.
You can sell covered calls (if you own the stock) or naked puts (if you don't own the stock.)
Or you can get more complicated with spreads and that kind of thing.
Either way, our goal is to have the option expire worthless and keep the money you collected for selling it.
Now, I know you probably have a ton of questions.
Two of the most common ones I've seen are:
- What if I sell a covered call and the stock gets called away from me?
- What if I sell a naked put and the stock gets assigned to me?
These are great questions and I'm glad that you're concerned about these things.
It shows that you're thinking!
I won't answer those questions here, because I'm running out of space, not to mention time.
But I want to do you one better:
I want to invite you to join me next week — Thursday, August 3rd at 1pm Eastern (and every Thursday after that) — for my new show "The Weekly Spread".
It's completely free — and there's nothing to buy. I simply spend 30 minutes talking to my pal Norman Hallett about all the ways regular people like you can use income trading to pull income from the markets.
Stay tuned to your email, I'll be sending reminder emails out before we go live.
And remember: this stuff only works if you put in the work.
Learn the steps. Write them down. Internalize them. And then apply them.
There's no magic. These are the same steps I follow for my own trading. And I know that you can get some stellar results from them — if you put in the work.
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