How To Sell Options For Passive Income In Interactive Brokers

In this video, I show you a step by step guide on how to sell put options in Interactive Brokers, from finding options, selling options and what you can do after selling. Enjoy!
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[@p6h14]

This is exactly what I need cos I cannot understand IBKR video tutorial at all! Haha. Thanks Kelvin! Keep up the brilliant work!

[@marianmarianov2948]

Bless you Kelvin! Thank you so much for doing this!

[@mosesleesh]

your video is fun enough to watch, keep it up!

[@cowboybuddhaful]

Thanks Kelvin, very useful video! Hard to believe IKBR doesn't provide this quality of video! Keep up the good work.

[@joyjoyjk]

Thank you for this video!

[@dmitrynikonian5633]

Great video, Kelvin, very useful for a beginner like myself!

[@esmd8500]

Thanks for the video. Super helpful!

[@rebellion6331]

been watching since 5k, you're the goat man

[@KelvinLearnsInvesting]

"Thanks!" - Goat man 2021

[@reinvm6785]

Thanks Kelvin! Liked and Subscribed!

[@HoneyMoneySG]

Good video on options education and Congratulations on 20k subs!

[@KelvinLearnsInvesting]

Thanks! Hope your channel grow quickly too :)

[@chilledgamezone4950]

Subbed i been asking around and nobody replied and then found your channel and options. Il be using your advice to action my options now

[@adsonlucena]

Kelvin many thanks what a great video! Greetings from Brazil!

[@jamesni5766]

Such a likable chap 🙂

[@XkeysmasherX]

Hallo! The steps you shown... Is it counted as cash secured puts in the wheel strategy u mentioned? Thanks!

[@sivakoti]

Thank you my friend ❤️❤️❤️

[@kcirrred9923]

Hi keIvin, thanks for this video. I think my current ibkr is cash account. Do you need to change to a margin account for option? By changing the from cash to. Margin account any risk or things to note?

[@monglongtan5772]

great. thanks

[@bernard14HD]

hi may i know how to enable option selling? do u need min capital put in into IB?

[@SuperBlack1337]

at 8.17 you can see just before the sell order is submitted there are initial margin and maintenance margin rows. Does this mean the order is being done with a margin loan or is it cash secured?

[@wongkevin85]

are you using cash or margin account type on ibkr to get assigned after selling put options?

[@racheldizon6883]

Hi,.. I'm not sure how to understand the portfolio (9:24) for selling PUT options. Since you are being paid premiums, why are some of the unrealized P&L negative. I thought you are paid the premium upfront?

[@sushantgulati8759]

hi , can you confirm when you submit sell order that time 103 usd got deducted from your account? or nothing got deducted that time and on may 22 if the stock remained above 21 you got 103...

[@mars16888]

Hi Kelvin, thanks for the video. Which report in Integrative Broker account can you see the premium? Thanks

[@Elizabeth-nb5xn]

Kelvin, thanks for showing it on IBKR platform!

[@Seflofia]

Hi When I want to sell a put interactive says I don't have permissions and when I go to options to activate permissions it's showing only EU and Asia market no US! Help

[@seantanmx]

Hi Kelvin, I alr have 100 shares of a company. I would like to check with you, do you need to have a margin account in IB to sell covered calls? Or u can alr start selling covered calls with a cash account? Thank you very much!

[@jqpoolingful]

Is there still inactivity fee? I think there is some changes from 1 jul. Can do an update?

[@Nic-xf6or]

Kevin, at 10:50 you explain on how to close a sell option. if i go with limit price, how do I know what is the premium i need to pay back? Does -0.16 on your video at 10:50 will be a good gauge? Thank you. Sorry just move from TD to IBKR, still lost

[@GlenHoInvestingMadeSimple]

Nice haircut👍

[@rlei327]

Hello kelvin, any chance you would do a demo on sell covered call on IBKR?

[@hassanelhais2517]

Good video .

[@christinewong3368]

hi kelvin. Can buyer exercise option anytime once strike price is reached or need to wait till option expiration day?

[@KelvinLearnsInvesting]

They can exercise anytime they want

[@terenceyang8672]

Thks kelvin

[@jkfj3230]

Hi Kelvin, thanks for your video and very easy to follow. Can you do a video how we can cancel sell put before it expired if I change my mind on the option to cut lost. Thank you.

[@emerge87]

Thanks Kelvin for sharing. Can I check if I also need to convert from SGD to USD when selling PUT option?

[@atkm526]

In my experience, you can still sell puts if you have a margin account without any USD. It will just display a negative USD amt.

[@ronyip6124]

Hi Kelvin, thank you for sharing the knowledge on selling options. It is very clear and detailed. Can I ask if I want to start selling BAC "put options" - 1 week expiry date, example: 5th Nov 2021. The option order will expiry after the market close in US on 5th Nov 2021. And then, I can close it buying buying back the same "put option" order with "Zero" dollar. Is my understanding correct ?

[@Nik-up5kg]

Nice video.quick question. When selling puts, under performance profile it says max move 5% 10% 30%. What is this ?

[@Nik-up5kg]

No reply ?

[@tme9786]

Hello Kelvin! May I please ask... If I get assigned 100x stocks of PLTR and wanna sell a covered call after being assigned (so that if it's in the money they'll just buy my stocks at the strike price), how do I do that on IBKR website? If I have the 100x stocks and if I sell a call option on the underlying, does it automatically take my stocks?

[@nathanlichti]

Hi great video! I was wondering, if I close my "sold put" option prior to expiry date, do I still keep the initial full amount premium?

[@CAPTAINSARGE]

No. Depends what you sold the put for and what you bought it back for I.e. sold for say 1.00 and bought back for say .60. Here you pocket .40 in profit

[@MingQing]

Wow you got 20K sub already nice!!!

[@KelvinLearnsInvesting]

XD

[@michaelthestoryteller9908]

Do covered call supported for HKEX for IB ?

[@andyneo424]

Thanks for the tip of the delta and the options rollover. Learn some other greeks so we can all be pro together leh haha.

[@justbe3708]

Hi Kelvin, Please explain how to buy US index funds and mutual funds through interactive brokers, step by step. It may be your next content for video. Thanks

[@ohaigorgeous8663]

How do you subscribe to real live data for options for IB and how how much is the subscription?

[@rahuljadhav4941]

Hi Kelvin, Thanks for your video... Just wanted to know..how the margins are calculated by Interactive brokers, when one sell uncovered call and put options thanks

[@geoffreylim6993]

Finally IBKR wooo

[@danielwong5607]

Sell the covered call is it the same you have apply for selling the cash covered put? Delta is 3 and out of the money as well? Thanks

[@KelvinLearnsInvesting]

Yea, can use 0.3 delta for both. U can adjust according to your risk tolerance

[@yingqiliow]

Hi Kelvin, just wondering when you said the premiums will be received "immediately", does that mean that it will be debited to the realised P&L immediately after i sold the contract (on the day itself), or would it only appear at expiration?

[@darrenang7742]

You will get the premium immediately after you sold it, it's the same for other brokers.

[@morfeuss85]

is selling a put option same as selling covered call? and how do you find out the money you receive?

[@ivansam2207]

How much fee you usually pay on buying or selling option in for IBKR?

[@adelinalo7692]

Can you also please clarify again what the difference between the white and blue shaded areas were again? I didn't catch what you said but I'm sure it was important, thank you

[@donald1983]

Do you need to open a margin account in IBKR to trade options or a cash account will suffice? I saw Initial/Maintenance Margin in your order screen

[@CAPTAINSARGE]

Both will work

[@ronaldtan4776]

Can you share a bit about rolling an option position? When to roll and what level to roll?

[@chilledgamezone4950]

I dont understand closing an option or if some excercise an option. Does that mean using the above example i have to pay someone $2000.

[@maartenv4611]

Hello, thank you for your explanation. I want to do bull put spreads but I do not know how to set a stop loss or close them to re-open a position elsewhere on Client Portal of IBKR. I hope you can explain a little bit or send me to a video. Thanks.

[@tme9786]

Hello Kelvin! Can I check with you, how do we check whether its american or european options on IBKR? I just sold a put option on PLTR yesterday as well - but was wondering...

[@KelvinLearnsInvesting]

All the stock and etf will be american option, like PLTR. The index like SPX, VIX are european option

[@stanleywong9686]

Hi Kelvin, Want to ask. This may sound silly but, How to enable options trading permission in IBKR?

[@bananaeyesbananaeyes]

Ya I’m facing same problem, not allowed to trade options in IBKR, is there any basic requirements for financial status or margin account to start options trading

[@joetej1023]

Hi Kelvin, Can you sell options in HK stocks?

[@chandankourani9726]

How to get permission for option trading on interactive broker? Any suggestions

[@jlingr3072]

hihi, are you using margin account on IBKR to trade options?

[@andyng1672]

Hi Kelvin, can help to advise how to decide on the strike price and what is the consideration on deciding on the strike price? Thanks!

[@KelvinLearnsInvesting]

I'll normally sell around 0.3 delta. I will also check chart see the stock movement to decide a safe distance t sell

[@gauthamrajadanran4476]

Hi Kelvin, you can do the wheel strategy in IB right?

[@KelvinLearnsInvesting]

Yes

[@teocelestial141]

Hi Kelvin thank you for the video. Do i need to prefund my account before buying the option? Just in case someone exercise the option amd i have to buy the shares.

[@drwillixs163]

There will be margin requirements - excess ready cash. I think it’s above the premiums you receive from the sell. So funds are required

[@TK-hw6jk]

I added sufficient funds to my IBKR account just to be safe b4 I sold put option on Apple, enough to buy 1 lot of Apple. But after that I still keep getting emails from IBKR saying that my margin is only 6%. I using cash account. I think if using margin account then no need pre-fund? I dunno if IBKR will allow u to proceed with selling the put option if insufficient cash in your account.

[@drwillixs163]

@@TK-hw6jkYes, specify margin account. The preview function also allows you to see the before and after. Anyway if margins exceed accounts, the trade won’t go thru. Best to have excess margins for the trade. Ie calculate possible swings. If you swing over the threshold, you may be closed out

[@joycehuang86]

你好Kelvin, why is Delta 0.3 the best? If the strike price is super low (further away from the stock price), the option should have less chance to be executed? because it is less likely it will drop to that low within a certain time frame

[@KelvinLearnsInvesting]

Ah, it's a balance between risk vs reward. Some group done a study that showed that 0.3 has a low risk of getting assigned, but still give a good premium

[@TK-hw6jk]

Hi Kelvin, what is difference of rolling the options instead of: 1) letting it expire and then sell another put option? 2) buying the option back just before expiry and then sell another put option? Is it just more convenient, or lower fees or got other impact? Also can u demo how to sell covered calls using IBKR? Thanks!

[@keonng9618]

Hi! Rolling just means buying to close and selling to open so it’s the point you said in point 2)

[@keonng9618]

Letting it expire worthless you don’t need to pay commission to close the option but you risk the stock price collapsing and you will get assigned if that happens

[@TK-hw6jk]

Got it. Thanks

maaan that "I noob" broke mee 😂

[@chazwoza]

Hi Kelvin, love your videos. What tools/sites do you use to get realtime or live options prices ?

[@khannaravindra]

If you need real-time prices subscribe with interactive brokers. I think $ 1.59 per month

[@kokleongchia8479]

1 option in HK market equal to how many shares?

[@pslee4389]

Hi Kelvin, does Market as Order Type means the system will automatically choose mid price between bid and ask when the order is submitted?

[@KelvinLearnsInvesting]

If you are selling options, market will choose the bid price

[@pslee4389]

@@KelvinLearnsInvesting, OMG, that means we will earn less by quite a big amount in the long run, right?

[@ponpon45]

I have just do a BB put options. May I know whether I need to own the share to sell the options?

[@KelvinLearnsInvesting]

If you are selling covered call, need to own the share. For cash covered put, you need to have cash

[@adelinalo7692]

Great video thanks! Can you please explain what rolling options are (what you had at the end of the video?) and what the benefits would be? I am very new to options (never used them before but am hoping to start and build up my current dividend portfolio with selling puts). Can you also do a video of how you calculate how much options brings in annualised?

[@KelvinLearnsInvesting]

Rolling means: buy back to close current option + sell a new option. You can use this to give more time for the stock to recover. Ah i'll talk about the option profits soon

[@bigpapa1472]

Good and funny analogy on the CNY gambling scenario 👍🤣 By the way, for a real/live account holder, does the option chain data feed delays for 15mins too?

[@KelvinLearnsInvesting]

Yep, 15 mins delay

[@Phoenix258]

this is great, funny too! just got into IBKR and this makes it much easier, thanks.

[@chewgstring]

Thanks for the great video. U mentioned the price is delayed 15 minutes, r u showing this with ur demo paper money account? The real live account will have live price rite?

[@LastingWander]

In IB, you will need to subscribe to market data to obtain live prices.

[@unbox4253]

@@LastingWander how to subscribe?

[@shemteo5010]

hi kevin when you sell a put in interactive brokers does the money you receive immediately go straight into your liquid assets? I can't tell and there appears to be no way to check. Sorry doing options for the first time

[@shemteo5010]

@@KelvinLearnsInvesting thanks kevin, when i sell an option it appears as in my portfolio (as a -1 position) but there is a unrealised profit/loss amount that seems to change and flactuate when the market opens. What is that?

[@shemteo5010]

@@KelvinLearnsInvesting Thanks Kevin. As an e.g. I sold nio puts yesterday and recieved a premium of $200. In my portfolio, it is reflected as unrealised profits of $30. Can I assume what they mean by that is if I buy back my option now I will have to pay $170 hence my profit of $30? I assume by that logic the unrealised profit will start to increase as the put nears expiry? Am I on the right track?

[@KelvinLearnsInvesting]

@@shemteo5010 U are right that if you buy back your option at $170, u will have $30 profit. Yes, the option price will decay when it nears expiry. But it also depends how near the option is to the strike price, if it goes in the money, the option price can also increase

[@shemteo5010]

@@KelvinLearnsInvesting ah ok thanks!

[@kaidollarsense]

Hi Kelvin, thanks for the video. Could you do another video explaining the meaning of extrinsic and intrinsic value of an options, in layman term?

[@WallstreetMemes]

If you don't want to wait until then, you can also have a look at the options video of In the Money (Kelvin recommended it, I watched it and it's great! should be around two and a half hours)

[@kaidollarsense]

@@WallstreetMemes missed your comment, but yes shortly afterwards I found his videos. Thanks!

[@dteosk2018]

Hi, can you explain to us what is a poor man’s covered call? Also, can you help me to just clarify. As long as we are selling an option (call or put) our aim is for it to expire worthless so that we can keep the premium?

[@rajankishor8034]

Do you need to have the funds in your account for when you get exercised or does your account go into negative?

[@KelvinLearnsInvesting]

I usually don't have the funds in the account, because I'm selling in margin. So sometimes it goes negative

[@rajankishor8034]

@@KelvinLearnsInvesting Thanks. So if you have a cash account you need to have the funds to make this trade?

[@KelvinLearnsInvesting]

Yea, u either need cash or margin as collateral

[@rajankishor8034]

@@KelvinLearnsInvesting Thanks. What of you turn of "limited options trading" ?

[@kxlee335]

on ibkr, how do u know if u r selling a naked put or a cash secured put?

[@KelvinLearnsInvesting]

Just make sure u have the money to buy 100 stocks

[@christinewong3368]

Noticed there is positive and negative Delta value, is there a difference?

[@KelvinLearnsInvesting]

Calls have positive delta, puts have negative. Both works the same

[@Hongshushu]

Thanks Kelvin. Made my 1st option trade but instead wishing for it to expire worthless, I'm actually hoping it'll be exercise and I can own it at my desire price hahaha... Is this a good way to buy stocks?

[@KelvinLearnsInvesting]

Yea, a lot people are buying stocks using this method. 2 downsides are: - very cash intensive (no problem if you are rich) - might not be able to buy if stock shoots up (can sell atm or deeper itm)

[@ybbolb]

Will I still be subjected to the $10/mth account fee if I just hold options and not stocks in IBKR?

[@KelvinLearnsInvesting]

Yes will still have $10 fee as long as the total asset is below $100k

[@ooi6880]

Hello, in the video you sell one put option at $21, this means i need to have at least $2100 to open this trade or lesser than this amount?

[@KelvinLearnsInvesting]

Yup, that's right

[@Davidcjw]

@@KelvinLearnsInvesting Can you sell it naked and if so, is there a certain maintenance margin?

[@switchxanime3264]

Hi Kelvin, Have you ever facing your market type order option not being filled immediately? For my case sometimes it take 10-30 mins to be filled and my stop loss didn't executed when it reached the stop loss price. If you facing these issues before, appreciate you can share some tips to solve it. Thanks

[@KelvinLearnsInvesting]

Yes, but its very rare. That’s because no one else is buying/selling at that strike. To avoid this, its better to do the trade when the stock price is still near to the strike, not wait till it has moved far away

[@hopemeng7263]

how to do paper trade at Interactive Brokers?

[@xj7937]

do you still feel that gme has poor financials with the secondary stock offering?

[@KelvinLearnsInvesting]

I haven't really look at the stock, but i heard they do not have a profit yet

[@besttoysever1628]

Very good video and very good channel you have. I have two questions ? 1. Can you sell put options on an Interactive Brokers cash account ? If you have the available cash of course. 2. If you sell a put option on an Interactive Brokers margin account how is the margin calculated ? If you have lets say 3000 $ and you sell a PLTR put do you get charged the margin interest even if you have the money ? Thanks you very much.

[@KelvinLearnsInvesting]

1. I think its possible, but i haven't tried it so i may be wrong. 2. If you have the cash, the cash will be used as collateral. But you don't have enough cash, margin will be used as collateral. BUT there's no interest, because you are using margin as collateral, but didn't actually use the money.

[@besttoysever1628]

@@KelvinLearnsInvesting Thank you for your fast answer. I subscribed and I am going to watch many of your videos. Have a nice day.

[@johnybravo5667]

Hi how do you protect your position when selling calls? Do you have to buy 100 stocks in advance?

[@KelvinLearnsInvesting]

I normally sell call when i have 100 stocks. Otherwise it will be naked call, which is very dangerous

[@johnybravo5667]

@@KelvinLearnsInvesting Thanks!

[@saifudinsaleh]

Does IBKR has "At the Money" option?

[@KelvinLearnsInvesting]

Technically yes, you just need to choose the option that's closest to at the money

[@shemteo5010]

Hi Kevin another question is when you sell a put, do you actually receive the premium money straight away or do you receive it only after the expiring of the put/contract. Ie. if you buy and end the contract earlier than the expiry date, what you receive is the unrealised profit/loss?

[@keonng9618]

You will receive the premium right away after selling put options.

[@terry5817]

Show more option trading on interactive brokers pls

[@jcfollower4]

Y is my don't hav the bidding and asking price 1?

[@KelvinLearnsInvesting]

You need to manually add the columns

[@youtubet3e416]

I notice most of the videos you only teach sell options.. what about call options? Can teach us how? Thanks

[@kokleongchia8479]

Does Interactive Brokers charge any fee when options are assigned and i receive for example 100 shares?

[@KelvinLearnsInvesting]

No fee haha

[@jordantan1601]

Can I buy 100 shares from the stock market straight and use them to sell call option?

[@Michael-dy9ky]

Hey Jordan. yes you can, I do it all the time

[@takuya90]

Great video! May I know if the commission fee in your example of 1 sell option for PLTR is USD 1? Just want to confirm.

[@KelvinLearnsInvesting]

Is around $1-$1.20

[@beckschang5648]

@@KelvinLearnsInvesting Then is much cheaper than tiger brokers?

[@eightfoldsg]

So we have to add money into the broker that is good to cover the options? The word, Call and Put always throws me off

[@KelvinLearnsInvesting]

Need to add cash to cover. I know right, it is very confusing, took me few weeks to get used to it

[@bigno1900]

like!

[@tankh566]

Kelvin, Let's said I want to get another 100 shares and currently, I holding to 100 shares which bought at $10. Can I do an option on Sell call $13 & Sell put $9 with the same expiration date. Seem like I will be able to receive both premiums. But of course, I don't mind holding on to the stock if it drops to $9.

[@KelvinLearnsInvesting]

Yea you can. It's quite similar to Iron condor, but is covered with cash n stock. You just need to have the cash available to buy the stock if it drops to $9

[@tankh566]

@@KelvinLearnsInvesting Thank Kelvin. Will test it out

[@mikasaackerman865]

Somehow my ibkr account is cash, does anyone know how to make it to be margin and my options permissions still waiting long long

[@KelvinLearnsInvesting]

Check this out: ibkr.info/node/280

[@mikasaackerman865]

@@KelvinLearnsInvesting apparently students cannot have margin so jiasai lor. Buying power is really insane without margin.

[@KelvinLearnsInvesting]

Well.. your level is not high enough..

[@mikasaackerman865]

@@KelvinLearnsInvesting apparently is mas regulations that you need income, maybe they now scared of all these reddit investors who can lose a lot of money through options