How to Buy Apple, Tesla, and Amazon Stock 50% Off

[@StockandOptionMyLifeOfLearning]

💰 Join my Patreon to get access to all my Live Trade Alerts, Open Orders and Weekly Top 5 Stocks: www.patreon.com/mylifeoflearning ► Learn how to generate Monthly Cash Flow by Selling Options here: mylifeoflearning-randy.mykajabi.com/offers/EgeavtWJ 👉 Seeking Alpha has agreed to give my patrons and viewers a very Generous Discount. I was surprised they went as low as they did! If you'd like to check it out, here's my discounted affiliate link: www.sahg6dtr.com/B37MNP/R74QP/ 👉 TC2000 charts - use my discounted affiliate link to get a $25 discount on your first order of TC2000 charting service: www.tc2000.com/pricing/mylifeoflearning 🔔 Subscribe to this channel for Free stock and option trading Tips: kzbin.info 📺 Watch Next: How to Retire with only $250,000 using The Option Wheel Strategy on SPY: kzbin.info/www/bejne/gXS9ZYx8prVpkKc 📺 Mastering Margin: Tips from an Options Pro: kzbin.info/www/bejne/joacfXlrgNKngJo My Option Trading eBook: 📕 Get a copy of my eBook "New Beginnings: The Option Trading Story" amzn.to/2OgXx58 📕 📈 Purchase My Spreadsheets (as seen in my videos): etsy.me/3HHq5ge

[@billassim9014]

Nice video, due you use the Ib lite or pro ,

[@StockandOptionMyLifeOfLearning]

Thank you. I use the pro version because it’s traded through a company account, so it’s not an individual/personal account.

[@FireLt2017]

Would a strike price adjust with the stock price in the event of a stock split during the contract period?

[@tomd.7929]

Yes, the option would be adjusted. This can be observed by looking at stocks that were split, or if the company was bought out by another company. I used to have put contracts on SPRT, but they were "adj" to GREE. If you look at the GREE option chain, you will see SOME of the strike choices listed as "adj". This relates to SPRT option holders who's options got converted to GREE. I really got screwed on this one, because my $13 put strike will cost me $1,300 when it is exercised, but instead of receiving 100 shares of SPRT, I will receive 11 shares of GREE, plus $14 in cash. Ouch.

[@StockandOptionMyLifeOfLearning]

Yeah, I always prefer the stock splits without receiving any cash. That way everything should technically still be the same as before at least initially.

[@marks6072]

Ameritrade requires full amount on tap to complete the trade and that account pays nothing... So your ROI now starts looking like 1.5-2% on those put contracts... Can you do an updated vid on doing OTM vertical put spreads?? Thanks Randy

[@StockandOptionMyLifeOfLearning]

It is a lot lower return if you’re using a cash account that doesn’t pay any interest on your cash. Thank you for the suggestion. Here is a video I did recently on spreads: kzbin.info/www/bejne/q3azaJiYn6hnj7M

[@Zues64]

Thx for the content, Randy. I think selling LEAPs violates my rule of selling premium too far out (30-60 days) for me. I want to have theta work to my advantage. 50% discount is certainly attractive, but a 10% discount over the shorter term is a good option as well.

[@johnt697]

Agree

[@CAPTAINSARGE]

Did you actually do any of these options ? Thinking of doing the Tesla one myself

[@StockandOptionMyLifeOfLearning]

Yes I’ve done several of them. I also turned some of them into risk reversals.

[@CAPTAINSARGE]

@@StockandOptionMyLifeOfLearning nice

[@halbouma6720]

@@StockandOptionMyLifeOfLearning I needed one last week with Paramount. Oh well, had to learn that lesson sooner or later. lol.

[@PonderDuke]

Do you wait to sell puts until the price is at a certain support level and do you also take note on the vix at that time. I mean selling puts at a certain resistance level would be risky because the price of you put would increase and you can only buy back for a loss. What is your system there?

[@StockandOptionMyLifeOfLearning]

When selling put options, I don't consider the VIX. However, I do watch closely support and resistance on multiple time frames.

[@jimm4260]

Will an Amazon put sell @ $60 ever fill? Seems unrealistic. 🤷

[@StockandOptionMyLifeOfLearning]

The odds were 5.3%

[@Brayness]

Why do you sell a 75 point Netflix put spread? The margin requirement would be lower if the short put was naked or you could buy the long put around $30 higher for 10-15 cents

[@StockandOptionMyLifeOfLearning]

I bought it for black swain event protection. Keep in mind that your probably comparing the price of the long put weeks after the trade was actually done. Since both options are OTM, both of their values have drop substantially.

[@davesplace144]

You say it's a great rate of return - how are you calculating the ROR? Is it just based on the margin required? Also, when you have a margin call at IB they have an algorithm that liquidates your positions and these aren't necessarily what is best for your account - there are definitely horror stories about IB's algorithm costing traders a lot of money.

[@StockandOptionMyLifeOfLearning]

Yes, a trader always has to be very careful using margin. I never actively promote the use of margin. It's a double edge sword and can be great when things are going good but can wipe a trader out if they are using it improperly when things go bad, which they always end up going bad, it's just a matter of when, and by how much. The return on required portfolio margin is pretty good for these trades. However, if you calculate the return based on the capital you would need to actually buy the stock, then the return would not be that good. These are very low probability trades. And you could argue that it wouldn't be a good deal, but I don't see Apple fundamentally deteriorating so much that the company is worth half of what it is now in the next year or two. You're simply getting paid to see if you get the opportunity to buy at a tremendous discount.

[@StockandOptionMyLifeOfLearning]

💰 Join my Patreon to get access to all my Live Trade Alerts, Open Orders and Weekly Top 5 Stocks: www.patreon.com/mylifeoflearning ► Learn how to generate Monthly Cash Flow by Selling Options here: mylifeoflearning-randy.mykajabi.com/offers/EgeavtWJ 👉 Seeking Alpha has agreed to give my patrons and viewers a very Generous Discount. I was surprised they went as low as they did! If you'd like to check it out, here's my discounted affiliate link: www.sahg6dtr.com/B37MNP/R74QP/ 👉 TC2000 charts - use my discounted affiliate link to get a $25 discount on your first order of TC2000 charting service: www.tc2000.com/pricing/mylifeoflearning 🔔 Subscribe to this channel for Free stock and option trading Tips: kzbin.info 📺 Mastering Margin: Tips from an Options Pro: kzbin.info/www/bejne/joacfXlrgNKngJo 📺 Watch Next: How to Retire with only $250,000 using The Option Wheel Strategy on SPY: kzbin.info/www/bejne/gXS9ZYx8prVpkKc My Option Trading eBook: 📕 Get a copy of my eBook "New Beginnings: The Option Trading Story" amzn.to/2OgXx58 📕 📈 Purchase My Spreadsheets (as seen in my videos): etsy.me/3HHq5ge

[@jefflong1069]

Are you on Discord?

[@juanchito7332]

excellent analysis, very good orientation and strategy, thanks

[@davesplace144]

The title is a bit misleading since pretty much the only way you'd end up being assigned and owning these stocks is if the price fell significantly. At which point they wouldn't be such a great deal any more. Buying Tesla at $85 when it's at $164 - that's a deal, but not so much when Tesla has dropped to $80.

[@StockandOptionMyLifeOfLearning]

You are implying that the market is always 100% efficient. I disagree with you. Look at what happened over the 1st 7 months of 2020. What you're implying is that during that time the market dropped in value by 36% because companies were worth 36% less than they had been in January and early February. Then, within the next five months, the true and just value of the S&P 500 was right back where it was in early 2020. So basically you're implying that any time the market or a stock drops or goes up in value, it's absolutely right in its assessment of a company or the market's value. I strongly disagree with you on that. You're implying that fear and greed don't have an influence on the market and are absolutely efficient all the time. I believe history shows otherwise.

[@davesplace144]

@@StockandOptionMyLifeOfLearning No not at all - fear, greed and all sorts of irrationality play a part in the market / stock pricing. I'm just saying that if it comes to the point where the put option is going to be assigned, instead I would just buy the stock - unless there underlying fundamental reasons for the massive drop e.g. Nortel Networks. I just don't see this as an effective way to purchase a stock - but maybe that's just me.

[@RC-ob6in]

Randy, your are the Professor as always !! well explained. Thanks RC

[@StockandOptionMyLifeOfLearning]

Thank you 😊

[@presleyakokewhu]

Never would I think of options if all conditions aren't right. Finding right Conditions are really hard to find rather buying at face value is the Best choice and more business like. Don't be tricked by options contract discounted price nor trading on margin. It's not easy as it's said.

[@StockandOptionMyLifeOfLearning]

Thank you for sharing your thoughts. I have found there aren’t many things in life that are worth learning that are also easy. Usually the “easy” stuff doesn’t give you many opportunities to profit. Rather it’s the things that require some effort, commitment, education and experience that tend to produce the best opportunities. Some people don’t mind buying assets at “face value”. Personally, I never want to pay “face value” or current retail for any investment if I can help it. But that’s what makes investing so fun. We can all look at it from different perspectives, hav3 differing opinions, and all be “right” based on our personal views, situations, education level and life experience.

[@tomd.7929]

Selling out of the money, cash secured (not margined) puts, is a VERY safe and forgiving strategy, as long as you sell them when a stock is over sold. Meaning, the odds are in your favor that the stock will trade sideways, or rise in price, causing your out of the money, cash secured puts to expire worthless. You get to keep all the premium you collected, when you sold the put. IF the put is in the money, at expiration, you have the opportunity to let it expire in the money, and let the shares be assigned to you, OR, you can choose to avoid assignment by ROLLING the in the money put down, one or two strike prices, and out to a farther away expiration, out just far enough where you can receive a net CREDIT, instead of a loss. ROLLING allows you to get PAID, to avoid assignment, while lowering the price you would be obligated to buy the shares at. This doesn't have to be a "one and done" trade, that creates a win or a loss. This can be a campaign of consecutive ROLLS down in strikes, for net credits, rinsing and repeating, until the strike has been lowered enough to become "at the money", allows you to CHOOSE to take assignment of the shares at a MUCH lower price than when you first started, OR, you can let the last put in the campaign, expire out of the money. Either way, YOU WIN.

[@tomd.7929]

I have one more observation to share with you, before you disregard SELLING cash secured puts, or covered calls. BUYING stock, or BUYING calls and puts, only make you money IF the share price moves in the direction you want. You could hold shares forever, and actually lose money, if the price drops. It's a binary proposition. Up you win, down you lose. Same with BUYING calls. Up you win, down you lose, with the added risk of time decay, on the way to the expiration DEADLINE. SELLING options is a whole different ballgame, because of the ability to REPAIR and MANAGE the trade, for a PROFIT, even when the trade goes bad. You haven't looked into it deep enough, to realize that Option SELLING, combined with ROLLING correctly, for net credits, is the secret sauce of Investing, and Trading. Knowledge abates fear. Knowledge IS power, ONLY if you apply that knowledge.