3 Options Trading Strategies for Consistent Profits

[@TheFinancialMinutes]

linktr.ee/finimizeLINKS

[@TheFinancialMinutes]

@Jacky-Jack The Tiny Pumpkin Ya I think the markets are in for a much bigger reversal. The last 11 months has shown an average 6.5% move up or down in week 3-4 of the markets. I opened an OTM put debit spread accordingly for super cheap.

[@saadmiraaj]

How are you not 100k+ subs yet, your videos are immaculate, someone who actually explains in such good detail man, I'm a subscriber for life

[@TheFinancialMinutes]

God bless you 🙏

[@theprofitableinvestor6821]

Bro same

[@TheFinancialMinutes]

@The Profitable Investor Appreciate you 😊

[@123drobi]

​@@thetej2227,what, why???

[@Exoticandles]

Because he’s teaching you to risk 80$ to only make 18$

[@russellyaucher9887]

Excellent explanation. You touched on it for sure, but I would emphasize that the investment in your credit spread example will pick up $18 roughly 80% of the time or 4 of 5 times if you do this repeatedly. So if you do this call credit spread 5 times, and let it run to expiration, you will make $72 less one loss of $82 for a net loss of $10. Similar with the puts which incidentally, if done together is an iron condor, but that's beside the point.

[@johnm7421]

I’ve been watching your videos for over a month now. Love how you explained the credit spreads very clear and easy to understand. If I join the alerts $20 a month, most alerts are credit spreads, csp, covered call strategy? Thanks

[@theelephantowlandratratban4635]

You mentioned at 1.50 this ( I am confused by this) For call option - its itm if the stock is below the strike price For put option - its itm if the stock is below the strike price

[@TheFinancialMinutes]

Calls - itm if the stock is above the strike price. Misspoke during the recording but overlaid the correct text.

[@ssy333kk5]

I thought I am the only one who noticed this.

[@lactobacillusshirotastrain8775]

($18 x 80%) - ($83 x 20%) = -2.2 Not a sound strategy. You can expect to LOSE on average $2.2 every option trade like this and if you have $1000 to start with, you can expect to go bust in less than 500 trades on average.

[@TheFinancialMinutes]

I'm up 79% YTD but I'm not sure where you're getting 83/8 risk reward, could you explain?

[@lactobacillusshirotastrain8775]

@@TheFinancialMinutes Your first strategy of 80% chance to win $18 and 20% chance of losing $83. You'd get negative EV.

[@TheFinancialMinutes]

18*0.8 - 82*0.2 = -2 This is assuming you hold all these options into expiration to realize max profit or max loss. You have the option to close before expiration.

[@lactobacillusshirotastrain8775]

If you continue on with that strategy you will eventually go bust.

[@TheFinancialMinutes]

Not if you have a solid strategy for when to take profits/cut losses. You don’t need to hold into expiration and the likelihood of opening the trade at the worst value is small.

[@jonschlottig9584]

Good stuff! I'm still wrapping my mind around optimizing these 2 and 3 level plays. For now - I'm picking blue chip stocks I plan on holding, then selling cash covered puts to get more value on the stock price. Then once I own the shares I'm selling covered calls. And if the strike price hits I just repeat the process. Just doing that is looking to bring 20-30% low risk returns as long as the stock doesn't tank.

[@eldowns]

If you’re willing to risk a $500 width, why not trade SPX for the long term capital gains advantage?

[@Ivzq]

U can make more in a shorter amount of time

[@husenkuliev157]

So these strategies have more than 80% win rate? Doesn’t leap have 50/50 chance of winning?

[@TheFinancialMinutes]

In my experience yes, timing is very important on the LEAPS though. I've used them very sparingly only when the markets are extremely volatile and using that volatility to my advantage when the momentum turns around. At some point you'll probably be up on the LEAPS and you don't have to hold it all the way till expiration, I've closed mine probably 9 months or more before the expiration date.

[@nixodian]

@@TheFinancialMinutes aim for 10%? do you cap profits selling further otm at earlier months / weeklies? from your experience zebras more profitable to pmcc or pmcp or leaps only?

[@nathanludwig2562]

You got a new subscriber, Iv always heard about the wheel strategy but never took the time to learn about it, you made it simple. Thanks man

[@TheFinancialMinutes]

Glad I could help! If you have any questions feel free to reach out

[@sushilsharma483]

Very clean presentation. I appreciate it

[@TheFinancialMinutes]

Thanks 🙏

[@mynameisnotimportant2854]

Is credit spread the same as vertical spreads?

[@TheFinancialMinutes]

Yes there’s many names for them. Also known as bear call spreads and bull put spreads.

[@brandonlamontcooper8141]

thank you for you content, and wisdom my friend

[@patchybaby7]

Keep up the great work brother 🙏🏾

[@TheFinancialMinutes]

Appreciate you, Darren 🙏

[@kimberlynmanabat4265]

Can you make profit even if you don’t hit above the strike price in a long call? As I was observing my long call I noticed that although I am far from the strike price but noticed my premium to be above my cost. Thank you

[@TheFinancialMinutes]

Yes. You don't need to hit your strike price to make profit, you only need to sell the option for more than what you purchased it for. So say I buy a call for $1.50 and now it's trading for $1.70 I can sell it for a $20 profit.

[@romeorain]

Do your shares get called away if the price goes above the break even price? Or the strike price?

[@TheFinancialMinutes]

Strike price

[@markbaier4421]

Nice presentation.

[@TheFinancialMinutes]

Thanks Mark!

[@bobbyk.goforth1266]

I'm interested in becoming a member, but would like to see how trades are printed, some I have seen I couldn't descipher how to make the trade??

[@TheFinancialMinutes]

Check out the free trial on Discord discord.gg/NWVZCvpH4X

[@carlchilders2154]

Is it possible to be assigned before expiration date as in stocks?

[@TheFinancialMinutes]

Yes early assignment is an issue for any short option since the buyer can decide to exercise before the expiration date. With spreads if you get assigned early on your short leg, you can balance out the trade by exercising the long leg to get your account out of a deficit.

[@TheBigB4000]

Good stuff! These three strategies are the best for beginners.

[@OTMhzmt]

what's your guys opinion on the PowerX Optimizer

[@options888]

Basically it’s a LEAP + Poor mans covered call

[@nathanhammons8827]

Anyone in DFW that can show me this in person? I get the gist but just need a little one on one help.

[@reynaldotorres4349]

Good explanation, Which criteria you use to sell a call / put?

[@TheFinancialMinutes]

20 Delta for a put, at the money covered calls

[@MrClo48]

My new this might seem like a dumb question but if I sell above my break even price but it's still positive total return do I lose money ?or is the break even price the price that the underlying stock at exp for me not to lose any money if I don exercise my option to buy shares ?

[@MrClo48]

Also do I get back the priuimem /intial investment? Like normal buying and selling?

[@TheFinancialMinutes]

If it passes your breakeven you make money from the difference between the new price and breakeven For ex: If you have breakeven = 100 and new stock price = price 110 you make $1000 net profit on expiration. You can also sell the option before expiration to capture the time and volatility value of the option.

[@MrClo48]

@@TheFinancialMinutes so buying long contracts and selling them early is the best choice when you are past your break even .

[@TheFinancialMinutes]

Yes usually

[@aggerleejones200]

I can't understand why everyone seems to love credit spreads, they don't have a positive expectance, they are hard to role for a credit and they decay very slowly.

[@TheFinancialMinutes]

They’re the most consistently profitable for me

[@wheeliewheelie]

so what is your p/l so far this year and what is your win rate....

[@TheFinancialMinutes]

$5000 in profits or +30%, win rate 75% for the year

[@SeanSolano]

For me, the entire video becomes unsynced at around 1:30

[@TheFinancialMinutes]

Ya I had to make a cut on YT Studio and it's processing, might be there for a few hours

[@TheFinancialMinutes]

Should be fixed now

[@romeorain]

What delta do you like to use when selling a covered call?

[@TheFinancialMinutes]

20-30 but lately I’ve been going at the money for higher income

[@Unusedname1234]

Why do you only use robinhood?

[@TheFinancialMinutes]

I also have Fidelity & Thinkorswim but Robinhood is the quickest/easiest to navigate

[@calebwhite6282]

I’m very confused, I thought when you purchased an option you have a max loss of what you paid for it. You’re telling me that you are obligated to pay 45 thousand dollars that you don’t have to actually own these shares? No regular human can do that, what’s the point of actually doing it??

[@TheFinancialMinutes]

You can avoid by closing before expiration

[@calebwhite6282]

@@TheFinancialMinutesso if you don’t before closing, are you in debt 45 grand?

[@calebwhite6282]

@@TheFinancialMinutes or am I just an idiot😂

[@TheFinancialMinutes]

@@calebwhite6282 You can be if the stock lands between the two strike prices. It’s a very special case where both options have to be out of the money at 4PM but then one option becomes in the money after-hours.

[@zg7920]

If we hold over weekends how much Theta we paying for one or 3 days ?

[@TheFinancialMinutes]

Theta includes weekends and it’s the time value your option loses for each passing day so roughly 1-3 times theta plus weekends and the intrinsic value of the option if any

[@zg7920]

@@TheFinancialMinutes So, Theta it's not only market days count, but also weekends and holidays too, right ?

[@TheFinancialMinutes]

Right 👍

[@zg7920]

@@TheFinancialMinutes Got it. Thank you

[@teddyblack8380]

Ok thank god I wasn’t tripping thinking you where just mouthing random words on purpose

[@TheFinancialMinutes]

Haha! Should be fixed now 👍

[@TunikaDriv]

All fun and games until your long call is liquidated and your short call expires ITM. Being a 100 SPY short is no fun.

[@TheFinancialMinutes]

That's why you gotta close before expiration if it's close to your strikes

[@Fj8282haha]

90% bs the host talk ab stil get ya killed just like 0.0000001% BS

[@spilledfeed]

👏👏👏👏👏

[@Ryansacrobat]

When using the wheel strategy, does that mean you’re intentionally trying to get 100 shares on your put sell, so that you can later sell the call against it?

[@shawnd567]

Not necessarily. You're trying to collect premiums for a while and if you get assigned the shares, then you sell the covered call. Once those shares get called away, you repeat. Some have the goal of getting shares and others avoid it. Both methods work.

[@-mr3puttz-310]

Please tell me you lost a bet and thats a fake mustache. Wow

[@TheFinancialMinutes]

Lol nope, grew it myself 🥸

[@augustohofmann7286]

Good video, but delta does not define the probability of profit. It describes how the underlying price impact the option price. It has nothing to do with chances of profit.

[@TheFinancialMinutes]

It’s both, actually www.fidelity.com/viewpoints/active-investor/power-of-delta “Yet another application of delta is that it can provide a probability estimate of the likelihood that the option will be in the money by expiration.”

[@zmk666666]

Can you talk about managing credit spreads and iron condors/butterfly, like once they’re open and stock starts going the opposite direction, how to roll them, or manage the legs

[@backupraceres]

Hi. In the LEAPS buy put, you say 1.000$ of intrinsic Value, did you mean 10.000$? Also when saying prices I noticed that sometimes you say Four twenty for 420$ and also Four fifhty for 4.50$ which can be confusing. Great content. Keep it up!

[@TheFinancialMinutes]

Yes I meant $10K. For the intrinsic value it's calculated as the difference between the strike price minus the current value of the stock, multiplied by the 100 shares you're controlling. ($500-$400) = $100 * 100 shares = $10,000

[@KBBAKTHA]

BRILLIANT PRESENTATION on best 3 strategies

[@willgordon5737]

I have couple of questions regarding leaps, Why would you buy leaps? who can predict the stock market 1+ year out? You have to pay so much just to buy one contract, what is the benefit of leaps? Lets say after 3 months the price goes in your favor, at that time you would have lost 25% value (hypothetically) of the leaps contract.

[@TheFinancialMinutes]

Lets say you buy 2 options: 3 month expiration and LEAPS (1-year) The stock goes against you for 2 months but then rebounds the next two months The 3 month expiration likely would have lost all its value while the LEAPS still has 9 months to gain value, if the stock continues the new trend

[@willgordon5737]

@@TheFinancialMinutes thank you for clarifying that.

[@rheiajean3739]

Totally thought i was onto something realizing "the wheel" on my own... should have figured its a known strategy

[@charlescostigliola5478]

By Pin Risk are you saying that if the option closes between strike prices you could be on the hook to purchase 100 share? I thought you were just on the hook up to the maximum loss, in this case (between strikes a little less).

[@TheFinancialMinutes]

Yes, you would be short an in the money option, and the long option for your spread would be out of the money.

[@coachyamyam9666]

@@TheFinancialMinutes so then exercising one of the legs won't get you a safe landing?

[@TheFinancialMinutes]

@@coachyamyam9666 Theoretically you could exercise the other option but you would have to call up your broker and ask them to do so

[@snowmannyc1]

WoW - Lookup and he Greeks- your dead wrong. Delta is the rate of changes to the underlying security. Stock +$1.00 delta of .50 option is plus $0.50. Or not percentage of odds

[@TheFinancialMinutes]

It's both but that is the main definition

[@prashanthk.6843]

Is it possible to trade in options from India?. Or is it only for people who are residing in the country?.

[@TheFinancialMinutes]

I think you might be able to trade options with Interactive Brokers

[@prashanthk.6843]

@@TheFinancialMinutes o, but is that safe?.

[@saavyz]

@@prashanthk.6843 They’re a reputable company.

[@prashanthk.6843]

@@saavyz okay.

[@stevebalzar9701]

Okay?

[@options888]

Hey there your great content. May I know so much of your account do you trade options? Eg. If you have a 50k account, do you use up entirely or keep some in cash? Secondly, what products do you trade? Do you diversify them in term of strategy, expirations and products for your trades Thirdly, what’s your most profitable strategies that you and you bread and butter strategy that led to your success? Thanks

[@TheFinancialMinutes]

$15K for options trading in a $75K total portfolio. $15K in stocks and $45K in cash. I mostly trade spread options lately using a lot of out of the money debit spreads due to the high volatility we’re experiencing. When stocks are less volatile I switch to out of the money credit spreads.

[@Chris-zj3bq]

How does it effect max loss if you buy more than 1 contract on a spread? Let's say I buy 10 calls and sell 10 calls?

[@TheFinancialMinutes]

Your max profit & loss get multiplied for each spread you open. So if you have 10 spreads you have 10x the max profit/loss.

[@trinitybruns]

This has by far been one of the best explanation/example video for options I have watched!! Thank you!!!

[@TheFinancialMinutes]

You're very welcome! Glad it was helpful

[@junlimarf5049]

Thank you 😊

[@venkatnjn6354]

I like your moustache

[@getsugatenshoFTW]

audio and visuals aren't synched up

[@TheFinancialMinutes]

I had to make a cut in KZbin studio and it's still processing. Should be fixed soon!

[@TheFinancialMinutes]

Should be fixed now

[@passivedividendsoptions]

ITM Ghetto Spreads have been doing well for me lately

[@TheFinancialMinutes]

I love ghetto spreads but I prefer OTM

[@passivedividendsoptions]

@@TheFinancialMinutes Yeah I like buying 5+ dollars in the money on SPY or QQQ, let it run up a little bit, then sell a short a few strikes above it. Timing is important though, because it can go against you if you don't time it just right.

[@TheFinancialMinutes]

@@passivedividendsoptions Right any major reversal can quickly wipe your trade out if you enter at the wrong time & wrong direction

[@moneymaster4812]

All these guys r chancers

[@TheFinancialMinutes]

Of course, no risk = no reward Unless you want 5% from treasuries, which isn't a bad option if you have millions and can make $50K/yr passively

[@SophiaBennett-r7f]

Thanks as always, though I wouldn't be selling puts right now, we're seeing some bearish signals hitting.

[@williaml9570]

Can’t you also sell a CC against the LEAPS?

[@TheFinancialMinutes]

Yes that’s called a poor man’s covered call

[@thanasballabani1026]

How do I decide the limit price on Put Credit Spreads? I never understood that.

[@TheFinancialMinutes]

Since you’re getting a credit to open and someone is buying it from you, to get filled fastest you want to enter the bid price

[@thanasballabani1026]

@@TheFinancialMinutes I understand that but I'm using IBKR since I'm in Canada and the bid or ask limit price comes as N/A so I have to manually put my desire credit limit price which is where I have a hard time determining.

[@TheFinancialMinutes]

@@thanasballabani1026 That makes it a lot tougher. I would imagine they give you the natural or mid price? Maybe start with that and continue lowering the price until you get filled

[@marcelalopez8927]

Anyone have recommendations for good books on options (for a beginner)?

[@elvis7859]

You risking 82 to make $18 in the long run you will lose

[@jdjprimer19]

Picking up penny’s in front of a steamroller. Gamma risk is way too high to be short vol on weekly credit spreads. Due to rate of ruin, a bad stretch will wipe out months of consistent profits. Not a matter of IF, but WHEN.

[@TheFinancialMinutes]

That’s where risk management comes in play

[@jdjprimer19]

@@TheFinancialMinutes But if it moves against you, you are negative right out of the gate. And with how small of premiums you collect, that small move with accelerated gamma will still affect your profit/loss regardless of how aggressive you are with risk management. My statement stands.

[@jdjprimer19]

It’s better to implement a better risk/reward over POP using 45 DTE and using credit spreads as a counter trend move, collecting minimum 1/3 distance of the width of strikes. This creates a much better risk:reward without the inherent gamma risk, and you are collecting a premium worth your time. This is preached by trading professionals like Tom Sosnoff at Tasty Trades and Tony Zhang at Options Play. Watch their educational videos for their rationale. It’s too much to discuss in one comment thread.

[@christopherhartsel1282]

Have you checked out Olive invest?

[@christopherhartsel1282]

Guess not…

[@TheFinancialMinutes]

Not yet

[@christopherhartsel1282]

@@TheFinancialMinutes I use your videos to help me understand different strategies. I wish you great success.

[@g.waynewylie4132]

What is the best platform for trading options?

[@J2A3H]

I think it’s Robinhood, also instant deposit for trading options right away with the others you have instant deposit as well but have to wait a week to trade options .

[@TheFinancialMinutes]

@Jahx Agreed. RH is great because the user interface is the quickest/easiest to navigate. The only things I'd fault them for is their 3pm spread close and PFOF. I'll be making a vid covering different brokers and share the pros/cons for each.

[@nixodian]

tastyworks

[@christianhernandez5537]

unreliable information.

[@1sbutterbeanok]

What's the best stock to start out with for selling options for someone who doesn't want to risk 30k or do you think that's minimum starting money in the trading game

[@1sbutterbeanok]

Nvm I just watched your video 🤣

[@1sbutterbeanok]

What website do you use to trade

[@TheFinancialMinutes]

You can start with as little as $5000 if you can find a good stock for $50. I like Aries and Robinhood for options trading.

[@jesslmc36]

I saw in one of your comments that you will be doing a video comparing different brokerage companies to trade at. Which I think is a great idea! Please include the option contract fees for each company if possible!

[@TheFinancialMinutes]

Sure thing 👍

[@options888]

Also what has been your returns on average a year since the day you started options thanks

[@TheFinancialMinutes]

Last year broke even, this year +80% from options

[@options888]

@@TheFinancialMinutes what’s your main strategy this year, markets so volatile

[@edwinjoseph322]

Call options has consistently been working and consistently making me weekly profit. All the other strategies have been hit or miss and has lost me A LOT of money......

[@TheFinancialMinutes]

Calls in this market? You must be very selective with your stock picks. Great job!

[@tateconsulting6486]

No rolling the Covered Calls or Cash Secured Puts. Better video on the next? Rolling is the KEY STRATEGY, I repeat KEY STRATEGY, that you failed to mention!!!

[@TheFinancialMinutes]

If I covered everything I wanted to this video would be 2 hours long. Here’s my video for rolling: kzbin.info/www/bejne/nZ3UpomZhN6Xmas

[@tateconsulting6486]

Got it!!! You need to pin that very important ROLLING video link as the first comment. The comment may say something like “if you are interested in more advanced options trading like rolling an option call or put, see link”

[@christianfiguroa7147]

Nice stasch

[@TheFinancialMinutes]

Thanks!

[@bcetinstitute3016]

What platform is good for demo trading these options strategies?

[@TheFinancialMinutes]

Thinkorswim is the first one to come to mind

[@quantstyle6448]

Nothing new, move along. Sell credit spreads or buy a call or put. Wow, crazy innovative strategies

[@TheFinancialMinutes]

You don't need to re-invent the wheel to make $$$

[@quantstyle6448]

@@TheFinancialMinutes Yes, luck trumps innovation. Directional strategies are based on luck.

[@TheFinancialMinutes]

@@quantstyle6448 Luck has a role in trading but no strategy should be based on it. Skill, knowledge, and experience are way better than relying on luck.

[@ellingtonellington9060]

SMH!! Very Confusing. Exegetical Exactitudes, homolecithal perfection, ecclesiastical proficiency. What did I just say? ASNSWER.. YOU DO NOT KNOW WHY because it is inside language for those in the profession. You do not have a clue as to how to teach so stop trying! Also try doing something else, this is not your lane!! SMH!!

[@TheFinancialMinutes]

If there’s anything you have trouble understanding you can always ask. Happy to help.

[@chiragmehta8212]

Very good video. Ty