If you’re reading this, then you’ve heard me talk about the secret way that I earn income – thousands of dollars – in just seconds. And today, I’m going to show you exactly how I do it. But first, I want to start with the basics.
Now, all of this is covered in the Cash Course, but if you’re reading this first, here’s what you need to know: You may have heard me say that options are like side bets – when you’re trading options, you’re not actually buying or selling shares of stock, just taking “bets” on what you think the stock is going to do in the future.
An options contract gives the holder (the buyer) the right (but not the obligation) to buy or sell 100 shares of a given stock at a set price for a short period of time. A call option gives the holder the right to buy 100 shares, while a put option gives the holder the right to sell 100 shares. And that’s what I want you to focus on today.
When you sell put options, you’re betting that the underlying stock will go up or move sideways within the next 30 days. On the other end of this trade is the buyer who’s betting that the price of that same stock will go down. And since you’re selling a put option to open the trade, you’re getting PAID right up front (this payment is called the premium). More specifically, you’re getting cash up front – whatever the buyer is willing to pay for the put option – and you give away (or “put”) the rights on those 100 underlying shares to the buyer.
But first, let's review some Key Trading Terms:
KEY TRADING TERMS
• Put Option: a contract (or “side bet”) that gives the buyer the right – but not the obligation – to buy a specific stock or ETF at a specified price within a specified time frame and gives the seller the right – but not the obligation – to sell a specific stock or ETF at a specified price within a specified time frame.
• Put Buyer: the buyer has the right, but not the obligation, to sell the underlying stock at its strike price up until expiration.
• Put Seller: the seller has the right, but not the obligation, to buy the underlying stock at its strike price up until expiration.
• Premium: the amount paid for the option.
• Underlying Security: the stock or ETF that the option allows you to buy or sell.
• Expiration Date: the date by which the option can be exercised. Upon expiration, the option expires and cannot be acted upon.
• Strike Price: the agreed upon price at which the underlying stock can be bought or sold. Don’t worry, in each Payday Alert I send, I’ll cover all these details so you know exactly how to place each trade.
• Exercise: the point at which the buyer or seller activates (or “exercises”) his or her right to buy or sell the underlying stock.
• Assignment: the point at which the seller of the option is obligated to (or “assigned”) the terms of the contract. For example, if a put option is assigned, then the seller will be obligated to buy shares of the underlying stock at the agreed upon strike price
Unfortunately for that buyer, you’ve got something he doesn’t... The Money Calendar.
Money Calendar tracks stock moves that have repeated 90% to 100% of the time... for the last DECADE. That means we’re looking for reliable stock movements that have occurred in at least nine of the last 10 years.
I’m talking every consistent move – up or down – made by the world’s top-rated 325 stocks and ETFs. And I’m going to give you an inside look at just how my Money Calendar delivers the best Payday Appointments each and every month.
How It Works
Let’s take a look at Amazon Inc. (AMZN) between August 11, 2017, and September 20, 2017 – over the past 10 years. Now at first glance, it looks like a normal calendar, but beneath the surface, it’s crunching millions of data points for hundreds of stocks over the last decade.
The green squares are dates with mostly Green Trade (bullish) opportunities. Yellow and orange squares are dates with a mix of Green Trades (bullish) and Red Trades (bearish). And red squares, naturally, are dates with mostly Red Trade (bearish) opportunities. (Fig. 1)
It’s as easy as reading a traffic light. You’ll also notice that each trading day, the Money Calendar has identified a number of trades – not just a single opportunity every day, but often 20 or even 30 possible trades. When I click on a day (for example, August 11, 2017), the next thing I see is displayed in Fig 2.
You’ll notice AMZN there in the far-left column... The green bars represent he maximum number of days it has historically taken for the stock to complete its move over the past 10 years. In this case, moving forward from August 11 each year. The number there is 29. So the Money Calendar says AMZN has consistently increased within 29 trading days of August 11.
Now one of the most important numbers on this chart is in the “Accuracy” column. The 100% here means that AMZN has increased every year over the last 10 years. And I never even consider a trade unless that number is 90% or 100%.
Next, I look at the “Average Profit” column to see by how much the stock price increased. Here, I see that AMZN stock rose $17.76.
Put it all together, on August 11, the average net profit per trade was $177.63. And the price of each share increased by an average of $17.76.
Now let’s look closer at AMZN by clicking on its stock symbol. We’ll get a screen that looks like Fig. 3.
What the Money Calendar is telling you here is that AMZN’s stock has gone up during this brief window for 10 years straight – 10 for 10.
So knowing this, would you have been willing to make a small bet that this trend would’ve continued last summer?
I can’t speak for you, but with those odds so heavily in my favor, I’m making that bet every day of the week.
And what happened? Just as the Money Calendar revealed, AMZN’s stock went up about 1.1%.
So if you went the conventional route and bought shares of the stock, a $10,000 bet would’ve only made you $110. But you don’t have to settle for the conventional... you could’ve made that side bet – a simple options trade. And it could’ve instantly made you $1,888 richer.
So go conventional and your $10,000 bet on the stock pays you $110... Or go unconventional and your side bet – the options trade – costs you nothing... and pays you $1,888 in seconds.
The choice is clear as day. And remember, as a Fast Fortune Club member, you’ll get a brand-new Money Calendar featuring 30 days’ worth of potential Payday Appointments. This is passive income, easy income – much better than punching a clock. This is freedom.
Three Outcomes When Selling Put Options
I’ve already told you that Wall Street engages in financial propaganda when it comes to options.
And selling put options is no different...
But when you do it the right way, it’s a great way to generate some fast cash each month – the kind that will allow you to book that dream vacation you’ve been wanting to go on – guilt-free, buy that car you’ve had your eye on, or even pay your kid’s college tuition early.
And just like with any trade, there are risks. So here’s the deal... When you’re selling put options, keep in mind that you’ll need a small amount of cash on hand for what’s called “margin.” Think of this as collateral for the trade that’s held by your broker to make this trade.
Here’s how you calculate how much you’ll need for the minimum initial margin requirement:
(The premium of the put option + 10% of the put option’s strike price x the number of contracts you own) x 100.
The minimum initial margin requirement is the premium plus 10% of the put option’s strike multiplied by the number of contracts you own – then multiplied by 100.
But just like any other type of collateral – you may not even need to use it.
And here’s the thing… Remember that you get paid right up front when you sell put options. So that $500, or $1,500 – or whatever the buyer paid – it’s yours. It’s yours if you win the bet – and it’s yours if you “lose.”
Here’s what I mean… When you sell options – there’s three possible outcomes of the trade:
1. The stock goes up, the put option you sold expires worthless – and you keep 100% of the premium.
2. The stock goes sideways, the put option expires worthless – and you keep 100% of the premium.
3. The stock goes down, the value of the put option could go up, and you can do one of three things:
• You can buy back the put option at its current market price...
• You can be assigned the shares of the stock at a discounted strike price (but only if you actually like the stock enough to do this), OR...
• You can buy back the put option and at the same time, sell another put option with a different strike price and an expiration that’s farther out. This is called “rolling out” and is the cheapest, most effective way to leverage a losing trade – without requiring more margin. And the best part is, you save yourself from having to buy shares of the stock. In fact, of these three choices – this is the one I’d use myself. Either way, you get to pocket some or all of that cash you received right up front.
What’s more, Money Calendar only recommends options on the 250 best stocks in the market.
So in the end, it’s like getting a discount on some of the world’s most expensive and sought-after stocks – AMZN, BKNG, GOOGL, AAPL.