Weekly Income – Using Options

There are multiple methods of using stock options to collect income. The methods discussed here are just two of many. The beauty of stock options is that there are always more options. They are as endless as the imagination of the user.

Adding stock options to your trades, is like the childhood story books in which you can choose your own ending based upon choices selected along the way. The more familiar one becomes with options, the more opportunities they will often have.

Simple Options strats:

1. Purchase 1000 shares of stock
2. using your trade platform, sell 1 option contract for every 100 shares owned, this is called “selling a covered call”.

Example:

Purchase 1000 shares of GE stock for market price of 13.55 ea and a total investment $13,550.00.

Then sell option an contract to expire May 18, 2021, 30 days in the future, at a set price of $14.00. This means you agree to sell the stock at $14/share only if the price is at or above $14 on or before the expiration date of the option contract. By selling this option, the seller will receive the premium of .46/share immediately. In this case, the seller would recieve .46 x 10 contracts of 100 shares each. Total cash received would be $460.00 immediately upon the sale of the option. Selling the option would create an immediate 3%. So the seller would get paid while holding the stock.

I do understand that this creates many new questions, but hold on to them for later.

Option TWO

How to Earn money without owning stock.

Earn money selling cash covered put or call options.

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Sell 10 contracts

income for May would be $4.60 for every