The Small Account Options Strategy That Works

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[@EliWesley5]

I am so happy that I made productive decisions about my finances that changed my life forever. I am a single mother and I live in Spain, I bought my second house in September and I hope to retire next year at 40 if all goes well. thanks to Louise O'Brien for helping me achieve this.

[@AidenHudson1]

You trade with Louise O'Brien too? Wow that woman has been a blessing to me and my family.

[@DylanMattew0]

That woman has changed my life for good. I attended her investment class couple of weeks last year and she’s the best when it comes for Guidance.

[@FarayelAlfie.2]

I'm new at this, please how can I reach her ?

[@RaelynnGrayson2]

I'm happy to see Louise O'Brien mentioned here, my husband recommended her to me when I was in Germany during Covid, she's amazing.

[@EzraAsher0]

I was skeptical at first till I decided to try. It's huge returns is awesome. I can't say much

[@HarrisBrewis91]

I will be forever grateful to you, you changed my whole life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Catherine Gauthier.

[@RichardDennis820]

Wow. I'm a bit perplexed seeing her been mentioned here also Didn't know she has been good to so many people too this is wonderful, I'm in my fifth trade with her and it has been super.

[@marthawolff]

She is my family's personal Broker and also a personal Broker to many families in the United states, she is a licensed broker and a FINRA AGENT in the United States.

[@JoeSugg1593]

You trade with Catherine Gauthier too? Wow that woman has been a blessing to me and my family.

[@barbara.ransom]

I'm new at this, please how can I reach her?

[@SafiyaNygaard_]

I was skeptical at first till I decided to try. Its huge returns is awesome. I can't say much

[@Johnbottis]

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[@Johnbottis]

HE'S MOSTLY ON TELEGRAMS, USING THE USERNAME...

[@Johnbottis]

@Gainwithwalter7

[@Mohammedsami235]

The same high-yield potential exists in both bullish and bearish situations; what matters is how information and technique are used. Not neglecting professional advice.

[@Alfredheranndez]

My favourite TA man. ALWAYS on the ball, honest and to the point Word is spreading fast I see.

[@Conchapinon552]

Walter James is outstanding. The knowledge you will gain is for a life time. Now is the time to invest in your education for 2024..

[@illmindedkidz9690]

If small account is 10K, then... Can you please do a Micro Tiny account of 1K ??

[@Tommi717]

😂😂😂

[@3DPrintingMagic411]

you may be able to do a stock between $20 and $40 that you are bullish on. Buy a JAN 2026 LEAP like .8 to .9 Delta, and sell monthly calls on it. Need to pick a stock with some premium. tech stocks are good targets. This is NFA, I don't hold any core positions in stocks under $50 right now

[@quantum7401]

First trading video I've watched about Leaps.

[@like_ATM]

Would be very good if SMB options vids covered all kinds of scenarios, not just the most favorable ones. What do we do when stock goes down after our entry? Long ITM call will be losing value much faster than the short one, we'll be accumulating loss fast. When do we stop out?

[@sebastiantevel898]

If the stock price begins to go down significantly, there are several options: 1 option is you buy a Put ATM strike and with at least 45 days to expiration, which will give you protection on the downside. This strategy is called a "Collar" in this case would be a "Synthetic Collar". You sell the Put when you see the stock is done going down, if it keeps going down you roll to another Put to further away expiration date. Another option is to roll down deep in the money the covered call, it will offer some protection but not to the extent of a "Collar" which if well done can give nearly 100% protection. Third option is to close the whole trade, take the loss and eventually reinitiate the same trade when the stock stops going down and will likely be able to do it at a lower price for all the options.

[@thatampguy]

Gambling is illegal in many states. 😂

[@stevemccullough7075]

Excellent video Seth! Excellent strategy for a long term investor. I do this with a portion of my portfolio with SPY. I usually go out 2 years on the LEAPS. “Boring” trade, but long term profitable.

[@seek3n]

How would i manage risk on a gap down. What happens if the debt call loses value and the credit call only have max gain?

[@hscelza]

Thank you Seth for your analysis, I found it very useful. The way I see it, these trades are like bullish diagonals. You can get hit very hard if the stock goes down through out the year due to the value loss on the leap CALL. Can you do the same with half or your money and use the other half to sell a 10 delta PUT and buy an ITM leap PUT? That would be more market neutral

[@TheOriginalPickleRick]

The strategy is great as long as the underlying stock keeps going up. Temporary dips can be saved because the long call is sold at a profit to cover the short call loss. But if the underlying stock goes down, you're in trouble.

[@ahmedmansoor6711]

yeh this only seems to work if the stock keeps going up. If it starts going down then we are screwed big time.

[@mcop1]

Are you selling the call one month out (30 days) every month?

[@ngphil11]

Are you closing the short call as soon as it gets tested, or on expiration?

[@TheOriginalPickleRick]

You would have to buy back the short call before expiration. Otherwise you would be assigned. You do this before close when it's clear the price is going to finish above your short call price.

[@ngphil11]

@@TheOriginalPickleRick thank you that makes sense. I also discovered that this strategy really gets hurt when price goes against your long call. I backtested MSFT and SPY in 2022 and when the market pulls back against your long call, all the premium captured for the year won’t cover the drawdown of that long leg. I’m trying to decide how to manage that vulnerability

[@LucyShaw-qd8gj]

I've been making a lot of losses trying to make profit trading. Just few weeks ago I lost about $7,000 in a particular trade. Can you help out or at least advise me on what to do?.

[@KatieMcGrath-tk9ji]

Lack of trading discipline is the primary reason for intraday trading losses it is estimated that nearly 80- 85% of intraday traders end up losing money in the forex market Experiencing loss is also part of the game but that don't mean you should give up

[@PhilipWalker-fp6yf]

Change the market or choose only one market with higher low and lower low to increase the profit. I am more unskilled than you but it is worth a try .

[@MrsAshleyMyers-pl8fx]

To be successful in markets, traders should understand the crossover between asset classes & liquidity flow. Daniela Montori focuses on Multi-asset trading, a single strategy to manage risk, profit, and the code or the actual decision-making across multi-asset classes. Her skills set is top notch.

[@EricaJohnson-ww5xv]

I'm surprised that you just mentioned Daniela Montori here. I met her at a conference in 2018 and we have been working together ever since.

[@MarcusGreenwood-iu8cn]

I remember giving her my first savings $20,000 and she opened a brokerage account for me it turned out to be the best thing that ever happened to me.

[@mauriceamaraggi8098]

Thank you for the video. But the profit is mostly done here when you sold twice the long calls. If this was not the case, if you were only cashing the premium of the 12 short calls I wonder what would be the profit since I get the value of the long call will decrease with time.

[@AllenMohammad]

Hey, I want to start investing but don't know where to begin. Any advice or contacts for help?

[@SarahDoran-oi6rw]

It's wise to seek professional guidance when building a strong financial portfolio due to its complexity.

[@Gos2]

and if the stock goes down instead how do you manage the risk? or you just blow up your account/.?

[@V_Man_007]

Do ITMs need to be leap options, can they be 6 month out? Does this strategy only works if you only buy leaps? Thank you for advise

[@mauriceamaraggi8098]

If I understand well in the case you could cash during 12 months around 150 dol without making any profit on the sale of the long call you would have end with 1800 dol of profit and 1160 of loss on the close of the long call that you bought at 9690 and sold at 8530. The PL is rather different in that case. So I guess to make some profit on this game we have to cash any intermediate profit that the long call can provide during these 12 months. Am I right or wrong?

[@hiatuz3512]

Anyone know if you can you do the same strategy on the PUT side? Any feed back would be great thanks.

[@bc8474]

Yes you can but it’s not a smart strategy

[@supercruchynoodle]

When buying deep in the money do you always want to make sure delta is 1 so that the price of the option moves the same as the price of the stock?

[@WorldSpectator705]

Don't think delta is ever 1, you can come close, but I believe there will always be at least a tiny difference in the amount of movement. However, often, you don't have to go that deep in the money to get to .90, and for a fraction of the cost of the underlying stock, so who cares IMO.

[@WorldSpectator705]

I wouldn't. As you get higher and higher in the delta, you pay more and more for less and less. In other words, if an .85 delta option is $800, a .90 option might be $1,100 and a .93 might be $1,500. IMO, probably not worth the RISK you are taking, to get a little bit more delta. In fact, I'd argue in the example trade, if we simply thought that Costco was oversold was oversold and due for a bounce, we could have taken less risk by buying a 3 to 6 months option instead of going out a year, and also not gone as deep in the money. That way, we might have only had let's say $2,500 at risk instead of almost $10,000, on a single stock.

[@stevesirchia4076]

Amazing strategy 👍

[@WorldSpectator705]

Hmm.... Yes, if price cooperates by going up and up and up. In which case any long strategy works well, but yes, I like it too, as long as one has high confidence in that upward price move happening!

[@stevesirchia4076]

@@WorldSpectator705 I think it works well let’s say on a good div paying company as well that you hold the stock and not the leaps. You earn the the div and sell the otm calls to earn more income. But ya the best way is to get a company that’s going left to right and there actually aren’t many funny enough only the few that are moving the market

[@vishatgm]

campaign scorecard do not show the cost basis of the two long calls

[@sylvaintrepanier5598]

They show the profit.

[@RainyDayz]

How would you handle strategies like this with COST and many other tickers currently at ATH’s or close to them?

[@WorldSpectator705]

A reply from a knowledgeable amateur - I would consider it quite risky myself. Note in his example, Costco had been driven down and down for a year, and he picked kind of the ideal time to buy the deep in the money call. If you buy a deep in the money call at ATH's, that's fine IF the market decides to keep motoring higher, but personally I'd caution there's a risk of a profit taking pullback or correction in which case the minor profit from the 10 delta call you sell will be greatly overshadowed by a large loss on the deep in the money call. Personally, I'd wait for a pullback, but I'd be interested to see what Seth thinks.

[@RainyDayz]

@@WorldSpectator705 Thanks for your reply. Yes that’s why I’m curious to know what Seth would suggest at these levels. There are a few sectors that are still low but nothing in individual names I’d try this on personally. Thanks!

[@WorldSpectator705]

@@RainyDayz I'm right there with you. I would like to see him comment more on strategies for markets that may be "topping out" or going into consolidation mode. I think actually he's done some along those lines, maybe, not sure, may have to look thru their videos and see. The thing about options strategies is that it doesn't make sense to force-fit a strategy to current conditions, if it's not a good fit, don't use it. As you're saying, you try to find one that "fits" the current market environment, or the environment condition your specific stock is in. That's what the pros do I believe.

[@RainyDayz]

@@WorldSpectator705 As we say in Boston, “if you don’t like the weather, wait a minute.” 😂 This definitely applies to trading

[@troyjeanmard4065]

If i increase the number of contacts purchased on the LEAP call, does that inherently increase my leverage and therefore the amount of contracts I'm able to sell?

[@Maymaymaymay12345678]

Correct

[@Swoodall88]

How do we ensure we protect ourselves against instances in which we happen to be completely wrong on the stock (or something unexpected happens) and then the stock tanks. You get the sold premium but you run the risk of significant loss from the leap call, right? In this instance you are making ~$150/month but losing ~$10k from the leap if things move aggressively south. How do you mitigate (or react) to that scenario?

[@kefaliask]

I want to see an answer for this as well. My guess is that 1. you pick a slow stock, nothing volatile. 2. I would take the loss of 4-5k since it is half of potential reward. 3. Hence why is called the poor man trade, because you will not be in position to reinvest when you lose them all! Jk

[@blakebrodeur3267]

Asked myself the same question and then remembered you probably wouldn’t do this on less than a blue chip. Very beginning of the vid he mentioned how good of a company they were.

[@Swoodall88]

Agree on slow moving blue chips but with the volatility of the market it's not outside the realm to take an aggressive dive on some fed news so wanted to know how they would manage.

[@blakebrodeur3267]

@@Swoodall88 hope this ages well, but I wouldn’t be too concerned with the fed tanking the market in an election year.

[@Kauffman578]

You pick a smaller delta

[@supercruchynoodle]

I might dip my toes into selling options via this technique

[@TopTraderLounge]

Oldest trick in the book. Better strategy would be to buy and sell mispriced options.

[@uniworldtech1727]

@@TopTraderLounge What is misplace options?

[@supercruchynoodle]

@@TopTraderLounge am not familiar with this. What are mispriced options?

[@theccieguy]

Is this something that can be done in a Roth IRA? Or any IRA for that matter?

[@registrationhater]

You can trade in an IRA if the IRA allows it. Typically you would have to open your IRA at a brokerage, or roll an existing IRA to a brokerage that offers IRA's. Additionally, you will need approval for this level of option trading

[@WorldSpectator705]

Absolutely, but you have to apply with your broker for the options approval level to trade spreads, or he is claiming the approval level to sell covered calls is all you need, though I'm guessing that varies from broker to broker. But for sure you can do it an any kind of IRA.

[@theccieguy]

The synthetic method requires a put. Can I buy or sell puts in an IRA?

[@sadootaqoo981]

Could you please make same concept but for people who trade cfds like myself, I bet a lot of your viewer would appreciate it

[@bc8474]

This is a losing strategy, your assuming the stock isn’t going to tank, if it does, sure you’ll profit on the call option expiring, but you’ll lose way more on the leap option losing value

[@mikeretired10023]

I can’t seem to reconcile the initial 10k. When you buy the leap, that money is gone. Now if you look at the scorecard, you start from $0. The $12,390 at the end is your total money after all this. Not your profit. Your profit was $2,390. Am I missing something here?

[@ArmandoRodriguez-wo6cv]

Why wait until COSt gets to 658.82, why not buy it back at 620?

[@Kenny-xf7dm]

When I go into a call on my account it says buy not sell.

[@DougSmileyVirgo]

Click on "Bid" to sell a Covered Call option.

[@Tha.Black.Profit]

6:22 AKA Poor Man’s Covered Calls (Spread)

[@brokenjets]

what brokerage would let me do this with only 1k in the account?

[@tradrjk]

Are you registered investment advisors?

[@richbalkissoon5322]

nope ... just a man in new york

[@xout1990]

Become indifferent to money (the trading institution)

[@cooldog60]

I don't understand how the leap call increased in value when the market was dropping.

[@WorldSpectator705]

He didn't buy a leap call on "the market" (e.g. - SPY), he bought it on COSTCO, which went up in 2023, a lot.

[@pedros8619]

You guys have great videos but never speak about the downside of the strategies. Obviously there is always downside but i would say people would learn a lot more if you teach on how to deal with the downside instead of knowing what you can earn. A video on a PMCC that goes agains you for a year or so and how you manage and roll etc would be on other level. On a channel like your you guys should teach that harder part of options

[@bradleygibson9686]

If a trader makes 4 million dollars a year and he sees a hundred dollar bill on the sidewalk across the street he can't cross the street to pick it up, because he would lose money by doing so

[@roc3429]

Covered Puts: Is this a profitable strategy?

[@tradingwithbigg3812]

Yes. Cash secured puts. Some call it the Wheel Strategy. Sell cash secured puts on a stock you wouldn't mind owning. If you get assigned, you sell covered calls. The Wheel always has you selling either way. Markus Heitkoetter teaches it on KZbin.

[@leishamenka7608]

Why get into this at the end of 2022 instead of a year earlier ? You couldn't have known that a bearish year would result in '22. The example demonstrated has the benefit of hindsight, and the real test of this strategy would be in managing such a trade that is not going to plan. But this was not revealed, unfortunately.

[@surfsunsand]

Is it just me or it extremely hard to trade right now?

[@blakebrodeur3267]

Damn this made me feel good after today 😂😂 Edit: made me feel better, not good!

[@JOZoSo.]

When is it ever easy?

[@surfsunsand]

@@JOZoSo. These are not normal times. The US Dollar is collapsing. Japan is on the verge of collapse, Dollar is being devalued/inflation. All these underlying movements cause the market to not follow the next step. When you think its a pullback the price drops.

[@zoltan1814]

its been a little slow, I swing trade and until this week, the last trade I placed was at the end of March.

[@gamedesign007]

My first disapointment! For a beginer a syntethyc stock?????? What will he doing on a bear market? Hey Man! A beginer does not know how to trde! He is always recogniseing an entry setup for buy! No way!!

[@johnmoser1162]

What happens if the price goes down below the strike and stays below after 1 year ? LEAP call -> 0, no stock, but the gain for the calls does not make up for the LEAP call loss. Again - a made up stupid recipe to get broke ...

[@joe97nsx]

People with accounts that small shouldn't be playing options unless they want to gamble.

[@johnmoser1162]

@@joe97nsx The issue is that these guys are always telling only half baken truth ... The edge one has would be SPX - goes up from the lower left to the upper right since 1930. That is why true covered call with this index makes sense ...

[@WorldSpectator705]

Well, that's the risk when you make a directional option trade, which this strategy is 80% or 90%. The covered call that is being sold provides a very small amount of protection but not much. So you need to feel quite confident your stock is likely to bounce before doing this trade IMO. Just buying a call is swinging hard for a home run. High risk/ high reward. The strategy Seth outlines here is swinging almost as hard, for a triple using the baseball analogy. You get a little income and a little protection from the call you sell, but not much, so it's still a high risk trade.

[@johnmoser1162]

@@WorldSpectator705 The point is you need a "security" where you can be sure that it will go up. That is why I say it's better to OWN SPY and only get like 10% pa. Using a synthetic covered call it could happen that you go bk just because you make a (couple of) major loss with the LEAP call.

[@Kenny-xf7dm]

You lost me at 3 min 55 seconds where you said we're going to sell what we don't have. You then started on and on about delta. 😔

[@rg-bx3ii]

You need to study more books about options sir.

[@Kenny-xf7dm]

I guess so. I learned about calls and puts. Call, you believe it's going to go higher. Puts, you believe lower. Either way there is a strike price. Above the call strike and you're in the money. Below the put strike and your in the money. Break even price is the same as at the money. What am I missing?

[@Kauffman578]

Think around the lines of selling car insurance. Abstract

[@JOZoSo.]

In the monye? Oki

[@Fortunefellas]

So a small account for you is $10,000? 😂😂😂

[@johnmoser1162]

it is ...

[@DrivenA111]

Use that to aspire to a larger account.

[@tradinglifestlye8732]

Anything under 25k is considered a small account since you can't clear the pdt rule

[@kukuJack]

You need to work more instead of watching youtube educational videos and complaining 😅

[@Fortunefellas]

@@tradinglifestlye8732 that makes zero sense and I beg to differ. The PDT rule does not apply to cash accounts. A small account would be anywhere from 500 to 5 grand more like $2000. And there’s no reason to start trading on margin with a small account unless you are very experienced. The title is very misleading to say “the small account option strategy that works”, but you need $10,000. 😂The average Joe usually doesn’t even have 2 grand to just start trading options with. I started trading options years ago with a $500 cash account. That is a small account. But 10,000! 😂😂😂 These guys are nuts. 99.999999% of videos I’ve watched that teaches you how to trade with a small account start at around $500-$2000 😉.

[@eccentricsmithy2746]

If you follow this dudes advice you will lose your money. selling options is a huge red flag. Your broker can assign you anytime they want and you will have to buy those 100 physical shares if you get assigned. Always buy a put or call, you will never be assigned.

[@metroplex3k]

yes - we know - if you were actually honest and discussed the risks in trading, you probably wouldn't have any viewers....