3 SECRETS For SUCCESSFUL Options Trading

[@johnhuang32]

Lee, I read your book a few years ago. I then began to trade options and I am a put seller earning income every year. Not home run always but steady income. Thank you. You are the best teacher.

[@leelowell]

Thank you. Glad to be of help.

[@jonathanklip44]

Hello…… how are you???? I think I’m your biggest fan in Mexico!😊 I have a question…… if I trade cash secure puts on the XSP, what happen if the position expire ITM? How much it’s my potential loss? ☺️

[@leelowell]

Hi - whether you trade cash-secured or have a margin requirement, the gain/loss is always calculated the same way - it's the difference between the strike price & the stock price at expiration. If you sold a $100 strike put option and the stock ends up at $95 at expiration, the put option will be worth $5 per contract. If the stock ends up at $90 at expiration, the put option will be worth $10 per contract. If the stock finishes at $101 at expiration, the put will be worthless with zero value.

[@Oneandonly-xn5ey]

loved your book. set the foundation for my option trading. everything else i do later was built on what i learned from your book.

[@leelowell]

Glad to be of help. Thanks for the comments.

[@HatedNelevated]

I'm only a few minutes in but already I love your energy and your tonality. I subbed- 😊 looking forward to learning more with you! 🔥

[@leelowell]

Thank you. Glad to be of help.

[@SJTaveras]

Great video, started implementing buying call[leaps) I’m very grateful for your work, truly appreciate it. Thank you

[@leelowell]

Great! Glad to be of help.

[@warnerlohse]

Thanks for the info on stock charts. Need to learn to read them…

[@leelowell]

Thanks for watching

[@josecampillo3041]

Thank you Mr Lowell .

[@leelowell]

Thanks for watching

[@iangreen1406]

Lee, thank you for doing this great video, a really good introduction to Options. I aim to join your community in the next couple of months when I have sorted out my finances. I live in the UK and look forward to being part of your community.

[@leelowell]

Thanks for watching. We'll be here!

[@sivakumarsathiamoorthy6583]

excellent video. have been following your material. thank you!

[@leelowell]

Glad to be of help.

[@quantum7401]

Thank you Lee Lowell

[@leelowell]

Thank you!

[@RonTrauernicht]

Thank You

[@leelowell]

Thanks for watching

[@warnerlohse]

Hi Lee. Have you ever done short term bitcoin futures contracts? Seems like a lot less work than selling puts. The returns are faster and better. I dunno? I just do it every day and the accounts go up. Thoughts?

[@leelowell]

No, not involved in that.

[@Summer-xm7zr]

Hello, I heard from you in the illustration today that you are using Interactive brokers platform. Is there a free trial to look into what is in there with you? Thank you.

[@leelowell]

You can use the link above in the description to visit their website. There isn't a free trial per se. If you open an account, there is a small minimum you need to have in the account. But, once you open an account, you can sign up for their paper-trading account which uses fake money, so you can test out strategies without having real money at risk.

[@lukaingo4650]

Hello. Do you have any videos that explain the options analysis tools that Interactive Brokers have?

[@leelowell]

Hi - I don't have any videos of that type yet. I've only filmed ones that show how to execute a trade(s). Which tools are you specifically interested in?

[@lukaingo4650]

@@leelowell Hi. Option Strategy Lab, Probability Lab, Risk Navigator, Volatility Lab

[@leelowell]

@@lukaingo4650 Hmm, I don't really look at those items too much, but if I do, I'll see what kind of video I can put together.

[@mohsha8315]

Great video Lee. Thanks

[@leelowell]

Thanks for watching

[@matthewzoch]

Hi Lee, really like your content, thanks for putting these out! In looking at your 80% sell puts strategy, what ROI are your seeing or expecting on this type of trade (taking into account the cash that needs to be ready to purchase the stock if you get assigned)? Example: SPY currently $455, 80% rule, strike of $364, 9 weeks out (Sept 29) $0.55. Have $45,500 ready and get $55, I calculate an ROI of 0.12%. I think I'm missing something here, let me know and thanks much!

[@leelowell]

Hi - thanks for the question. For us, we only use strike prices $50 and under, and never sell naked puts on higher-priced stocks like SPY. In that case we would use option credit spreads. But getting back to your question - most put-sellers use a margin account, so they would only need to have roughly 20% of the full cost on hand as collateral. With SPY strike price of $364, you would need to keep roughly $7,280 as collateral (100 shares x $364 x .20). With your calculations, you were taking the full cost of the stock at time of trade, which is not how it's done, since you would be buying the stock at $364 if assigned, not $455. As mentioned, it would be 20% of the $36,400. Now, if you were using a cash account or IRA account, then yes, you would need to keep the full $36,400 on hand at all times. This is why we use a margin account, because we can use our free cash more efficiently. If assigned at expiration, you would then have to come up with the rest of the $36,400. That is a lot of money, and the reason why we stick to lower-priced stocks. As far as ROI - it's technically ROM - return-on-margin. If you profited with the full $55, it would be divided into the margin requirement of $7,280, yielding a ROM of .76%. Still very low, but better than .12%. But, as a put-seller, that's not the end of the potential return on the trade. If you are assigned and have to buy the 100 shares, now your potential returns can be unlimited to the upside as far as the stock might travel. Most investors forget about this when selling puts. They think the only returns come from the premium received. Not true. If you had to buy the SPY at $364 and it went back up to $455, you'd have a nice $9,100 gain, divided into the $36,400 investment = 25%. Hope that helps.

[@matthewzoch]

@leelowell Lee, thanks so much for your quick response and explanation, this makes good sense. I'm going to continue to review your videos to learn more on the put option strategy. I like the idea of going 20% OTM, but if I never get assigned, I imagine there are good quality stocks that would offer a good ROI on this strategy. Thanks again!

[@kwamewiafe-akenten2843]

Please No ebook I am willing to buy thanks again

[@douanthomas8907]

Thank you!

[@leelowell]

Thanks for watching

[@polish2x91]

Are you Rob’s, from digital asset news, brother? U look similar

[@leelowell]

Don't know who that is. Give us a link so the community can vote!

[@12496k]

💯

[@frankbur6951]

Thank you !

[@leelowell]

Thanks for watching