How to Sell Cash-Secured Puts on Robinhood - Options Trading Explained

[@JakeBroe]

Give this video a LIKE to support my channel! Also check out my entire playlist on Trading Options here! kzbin.info/aero/PLscTZuOqKWIxSZzy4ObKWDznEsCot_1HU

[@tonyasmith9633]

Thank you for your videos. Can we talk about what happens after you sell your cash secured put? What happens between now and expiration date? What does the numbers mean on Robinhood? Why are my puts sometimes red or green? What does average credit mean? What does break even price mean? What does total returns mean what does market value mean what does current price me mean?

[@dwalker6868]

Learning a lot of Termanology and beginning to connect the dots. Thank you

[@JakeBroe]

You are very welcome D! Cheers!

[@justinsanchez22434]

One of the best videos I’ve seen on options ! Thank you so much 🔥

[@JakeBroe]

You are very welcome Justin! Thanks for watching!

[@utubedaveg]

I've made some put premium on intel but been sitting on 200 shares forever. Finally sold last week for a 20 cent loss. Glad I did after today. I used the cash for a IWM put.

[@JakeBroe]

Intel is definitely consolidating. At some point in the next year it will take off again, but probably not anytime soon.

[@DeanneDalton]

Your videos are so educational. Thank you!

[@grumpytrade]

Nice clean explanation. Thanks

[@stephtraveler7378]

Fantastic explanation of a live scenario w/ the changing premium.

[@romeorain]

What if you pick a strike price option above the market price, because 1. You collect a higher premium and 2. You are comfortable buying at that price because it’s still lower than your average buy in price of the stock?

[@jeffherz6848]

You just got another subscriber!, Keep explaining in a simple easy to understand way and you'll get the million subscribers soon.

[@felicitaking1360]

Jake Broe , when you buy to close do you lose the premium at this time? Also. With cash secured puts does the money have to be in cash or can it be tied up in another stock?

[@SjuniBe580]

Hi Jake, Thanks very informative and helpful series. I had quite a few blank spots for which I was trying to find answers. Your series helped for many but one thing I am not able to understand. If the market price price goes at or below the strike price let's say in 2 weeks and your contract will expire in another week. What happens in that case to your option position especially in Robinhood. Do I just wait for contract to expire to own the shares? and what happens to premium then cz they decay as we approach expiration. Lastly, manually do I need to do in Robinhood? or it settles automatically at the expiration? Thanks a lot.

[@coachyamyam9666]

Thanks for the info! I was wondering if you can make a video on looking at stock graphs and studying it? So that we know when the “right time” is to sell a secured put.

[@Faisal1504]

Thanks for explaining

[@rosaprint8676]

Thanks Jake

[@JakeBroe]

Thank YOU Rosa!

[@DM_2025]

Bro you explained it real good 👍🏽

[@PRHBxEaSyKill]

Thanks for all the help, please do buying calls and put explanations 🙏🏼

[@JakeBroe]

Those videos are coming JCee! Cheers!

[@dmbypsi]

At 8:02 you state that you don't really care if the price goes down to $40. Why is that? Wouldn't your CSP be extremely red at that point. Yes, you'll get the stock at 52 and yes, you may get your money back when it gets back up in price. But, the option itself is going to be hundreds of dollars down.

[@BlackwingDuck]

Hmm. When assigned, you're not getting the stock in any deficit, right? You're buying it at the determined strike price, which is the market price at the time. So your +/- overall percent change should be zero %. Sure, it can continue to drop into the red, but that's just regular stocks at that point. At least, this is my understanding.

[@rosariodipetta]

This is the great wheel strategy…very good 👍

[@JakeBroe]

Thanks Progetto! Cheers!

[@carlosmolinaguerra]

Thanks Jake. Great video. If you make one of buying a put and/or a call in robinhood, I will be the first to watch it. Keep up the good work!

[@JakeBroe]

Thanks Carlos! Those videos are coming soon!

[@hvacguy11]

Absolutely awesome video thank you!!

[@hauly7573]

Hi Jake, how is selling puts different from cash secured puts?

[@cryptogeek99]

Thanks for the video Jake, will the credit be deposited instantly? and can it be withdrawn?

[@JakeBroe]

Hey Anirudha! Yes, the credit is deposited immediately, but the contract now has a negative value and is in your account equal to the value of the credit. If you wanted to take money out, your broker would require you to stay within your margin limit.

[@ankuragarwal2003]

great video Jake. Where do I see the credit in my Robinhood account? Does it automatically increase the buying power by the amount of premium?

[@jasonhutchens4420]

Great video! I have been thinking about Cash Secured Puts for a while and going to sell some Monday. I keep nearly 100% invested at all times and going to sell some stock at a loss for taxes and use that to secure the puts. I was wondering though do I need enough to cover the full position or can I buy if the cash I have and the cash I get for selling the shares will cover the cost of 100 shares?

[@AAmtb]

Your walk throughs of this are brilliant. Curious if you think this strategy is a good idea when initiating positions during hot markets (i.e. right now, when S&P P/E is high, and there's hesitation)?

[@IamAWESOME3980]

Didnt know this is a youtube channel

[@tomTom-lb5cu]

Explained very well

[@JakeBroe]

Thank tom! Cheers!

[@tomTom-lb5cu]

@@JakeBroe I only trade options on Fidelity but I learned from you there too months ago, thanks for that. You teach things in a simple straight forward way and I really appreciate that and that’s why I’m subscribed. So far I only have an interest in selling calls he puts. I’m doing it in my retirement account and I’m retired but not needing that money to live off of so I’ve been only in cash or stocks from my beginning days of investing and it’s worked well and I don’t wanna change a winning formula but I’m adding to it with this extra income from collecting premiums plus I love learning new things and staying current with the times not getting left behind. The nice thing is whether the market is rising or falling always someplace to be earning from options I owe my success and understanding to 4 channels here and all are teachers, not stock pickers for their subscribers,

[@tonyasmith9633]

What happens if the stock hit the strike price on day five? (Expires in 30 days).

[@19Mrstormy]

third Friday is oct 15 though

[@JakeBroe]

This is correct, haha. I read the calendar wrong.

[@victormtz16]

Covered calls. Cash covered puts. My IRA and wanting to be involved thanks you

[@JakeBroe]

Cheers Victor!

[@TexasStubs]

What are the differences between the green numbers and the red numbers robinhood. just trying to understand.

[@marvinwelch7323]

Puts are red. Calls are green

[@marvinwelch7323]

Maybe it has changed. Haven't used rh in years

[@fendermon]

Great that use use real examples, thanks :)

[@Ruben901]

If only I had started getting into stocks back in 2016

[@JakeBroe]

Haha, you got it going now! Just think where you will be in 2026!

[@adammash948]

Hey Jake! Love the channel. I have a question about put options trading. Let's say I buy a $300 premium. That's the MOST amount of money I can lose, right? For some reason I thought you can wind up owing a lot more than what you put in

[@adaptableeffort]

At 11:08: that makes no sense dude. If you're assigned due to being below the strike price... that means you lost that $99... a lot of people don't understand, that premium you get is not yours until you close the contract at nearly $0 debit. it costs to close a contract that potentially negates your premium received.

[@joshuaperez9237]

So when you have a "sell put" contract open... do you literally just let it run so that it expires "worthless" in a sense by expiration day?

[@adaptableeffort]

@@joshuaperez9237 yes, you can do that, however if your put is losing, it's usually better to just roll it at that point because your put already did it's job, it negated some of the market's loss. (your delta started at a certain delta and eventually gets closer to 1 meaning you're matching the actual movement of the stock). However, I would recommend selling calls, reason being, when the market drops volatility goes up, so selling options sucks for puts, but covered calls can close out very quickly. if the market, shoots up, you let the covered call expire worthless, or just roll up around 3:30 or so. Also, traditionally the market goes up slower, so even a losing covered calls, on average, close out more favorably more consistently than a losing cash secured put because usually volatility goes down so even tho your covered call is losing, it doesn't lose as fast as opposed to a losing put in a bear market. market sentiment and how it effects your options is what differentiates a good options trader from a bad one which a lot of people don't look at those elements and then wonder why their option isn't performing the way they want. Study the greeks, they will make you very good trader.

[@todd5963]

Can you be assigned before the date? If Intel goes below strike price a week after selling put can they make u take the shares?

[@carlbook2051]

yes, the put may be exercised any time it drops below the exercise price.

[@JakeBroe]

Yes, you can. But this never makes sense. The person who bought the put contract on the other end can always just sell to close it and the contract is worth more (selling it back) because the contract has remaining extrinsic value. Exercising a contract early just loses people money, which is why it almost never happens.

[@carriondavid95]

Hey bro love your vids! I actually started watching because of the Airforce vids.Just curious what’s your opinion on crypto????

[@JakeBroe]

Hey David! I've made 2 video talking about crypto and why I don't invest in it. Check them out! kzbin.info/www/bejne/opCTpqSOppt3n80 kzbin.info/www/bejne/bX6riJepl9akmZI

[@gundruk]

Hi Jake! Can I exercise the (Sell Put Contract) option on the expiration date even if goes above my strike price? Thanks.

[@carlbook2051]

If you sell a put, you can't exercise it. The buyer of the put may exercise.

[@JakeBroe]

Not sure I understand your question. Are you asking that if you bought a Put Contract and it expires out of the money, can you still exercise it to get the shares? Yes, you can, but your broker might block you since this action just loses you money. you can probably call them to override them.

[@NLDLC0517]

Hey Jake, will robinhood release your collateral right away on the expiration of the contract?

[@JakeBroe]

That's a good question. I have to belief yes, once the contract is expired, the buying power is released. Nothing was bought or sold, so there is no 48 hour wait period for anything to settle.

[@chrisvinci5417]

Cash secured is a waste of capital. Just do em naked. Can always liquidate stocks or fund the account later. I typically just let the account go into margin deficit and use covered calls to offset the interest.

[@JakeBroe]

Yes, this is true and I agree with you... but I got to teach new people to just play with money they have first. But I sell puts that margin covers because it is free and it is the most efficient use of my money.

[@itsjonthetrader]

great video

[@misaelarredondo7933]

Jake are you pretty bullish on Intel? I think it’s a good company it’s just that it’s traded sideways since like April of 2018. Love that your using Robinhood by the way!!

[@JakeBroe]

Yeah, Intel is undervalued and has been consolidating sideways and is well rested. At some point it will break out and start uptrending again. Could happen next week, could happen in 6 months. But buyers will come back to this stock at some point.

[@christopherb7266]

robinhood margin rate of 2.5%, which i feel is really amazing. Is there a huge disadvantage to robinhood that i cant think of that explains why people pay 7% plus at other brokers?

[@JakeBroe]

Not really. People just keep investing with whoever they have been investing with. If Robinhood keeps taking market share away, the other brokers will have to lower their rates to compete.

[@listen1st267]

The downside with Robinhood is the market to order flow. Companies pay Robinhood for the data of where the users are buying and selling. The companies can then act on that info before our trades clear. However, I personally prefer giving the wall street elites my insider info microseconds before my trade clears rather than paying commission. Just know that for Robinhood your not the customer, you're the product

[@listen1st267]

I'm curious how much money he lost on selling that put considering Intel dropped almost 12% on that expiration date

[@mattk.9937]

This did not age well...

[@DominicPhillips-o4w]

How so?

[@edwarcastil]

Its good