I love the CSP strategy. Admittedly I'm still pretty new to options trading but last month I made about $750 off of a $20k collateral on my CSPs. Felt pretty good about that!
Now you're playing theta the way I like to. I only trade weeklies but a 3-4% monthly return is my sweet spot. I also prefer to keep 10-20% of my capital open to dodge falling knives or grab the occasional day or short swing trade.
Brad, The easy and more accurate way to calculate A.R.O.I. Is to calculate it in weeks. If the trade is less then 7 days that is 1 week. 8-14 days is 2 weeks ect. Now to figure that R.O.I. Take your premium dividend it by you capitol invested. Now divide that number by the number of weeks then multiply by 52. Done. This works a bit better because you cannot do the same trade with the same capital multiple times in the same week.
I love your videos, Brad. Glad to have a level headed dude around my age to get option advise from. Sorta new to options trading but getting a good feel to it thanks to you. Keep the videos coming!
thanks for the great content Brad, been watching your videos for 2 weeks, very easy to follow compared to a lot of other people, and those are really good and practical advice!
You don't multiply %'s for an annual return. Essentially if you keep putting the same money up, in the case of SWBI you'd net 5% return annually because you have to continue putting up the $1,700 or so dollars.
Oh I still got it.. here's the most recent update! Just rolled it again and made a more money on it! Update video coming soon ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-3YGDBfAxMaw.html
I love writing puts and I don’t bag hold if I can help it. This are my rules; don’t write puts above your average price if you own the stock. Write Puts only on stock that you like. Select a strike price with a good premium and little chance to get assigned. Make it worth your wait. If the stock tanks and goes way below your strike price wait till close to expiration and roll it forward for more premium. If the stock stays down and doesn’t recover you’ll be assigned but your average price it’s going to be in the ball park . That way you can write calls right away.
What happens to the Wash Sale rule when we keep rolling our ITM CSPs from December to January to February etc and eventually talking an assignment. (BTC for a loss, STO for profit netting some credit). Please help. Thank you!
Brad.. Thank you so much for this CSP video and others regarding rolling and closing options. As I do have the cash I perfer doing CS puts... So far so good ;) Thanks again.
Brad love the videos. CSP are great in this bullish market because the stocks are trending up. We sell the CSP and stock price rises so we get all the premiums. CSP are one of my favorite strategies.
With only ~$1500 in buying power, I've been entering weekly Put Credit Spreads on either Tesla or Amazon and collecting ~$140 each week. My goal is to keep taking baby steps until my purchasing power gets high enough to do cash secured puts.
@@danielclarke8053 Two weeks ago I closed it early on AMZN and took a small loss as I saw how the market was tanking. I haven’t opened a new once since then and will wait for the market to recover.
Thanks for these videos. I learned all about the math behind options for an exam a few years ago but took my time getting to the trades because MAN this still feels like a lot of money to me. But I like your style.
I roll CSPs sometimes, but it has backfired if you really want the stock. I kept rolling sofi, but only ended up with 100 shares. Really wanted 300 before it started pumping..missed out on good amount of extra profit.
Very informative video that will help many. Thank you! I'm going to try to duplicate your spreadsheet as much as possible if that's OK. It looks really good. Probably the best I've seen so far on RU-vid.
There is only one thing I don't like about your AROI math. In your explanation you stated you used the days you held the contract to figure you how many times that could be repeated in a year. Repeating a 4 day cycle 91 times in a year is very unlikely since there are weekends where trading isn't possible. If you adjusted your math for business days held and business days per year I think it would be a little more on point. Longer term puts AROI would be pretty much the same but shorter would come back down to earth a little. And then I think your averages would also match up better because right now if you use your 23 days and 3.45% averages you get nowhere near the 100% average you are calculating from your AROI column. Just my thoughts. Cheers
Watching old videos again lol Brad - Agreed, you're tying up capital with an option in play, but if your core cash position is like SPAXX or some kind of money market fund...then you're still earning interest on that committed cash. At least until assigned 👍
Great video thank you! Very interested in the fair value video. What percentage do you try to close at? 30% in a day? 50% overall? Would you buy to close this put when it reaches 40 ish dollars?
HI Brad great info will you ever take a loss or will you just keep rolling the options down when it goes against you? This video was from a year ago pton was at apprx $50 and now is $11 was curious to what are some best practices. Thank you
Every situation is different. With PTON I rolled a bunch and also sold more outs. Eventually averaged down my position close to $15 and profiting a ton over the whole process. It went very well
Great video! I prefer about 30 to 45 days for CSP's, but they do make solid returns. That's a good spreadsheet you've made there. Thank you for the effort.
The buyer of the put is insuring his stock. The seller of the put is the insurance company. In a down turn the seller is screwed. Like any other trade, you are either betting the stock will go up or go down depending on the particular trade.
Great Video. My SDC took a hit today AH too so I will be bag holder. I may sell a put again and may lower my average or move on to the different stock and let it recover
Awesome video. I love CSP. Had a rough time a while back when NIO and PLTR went sky diving. But I recovered eventually. Definitely want to pick decent stocks.
Thoughts on the strategy of selling CSPs and then if you do get close to getting assigned just rolling down and out over and over? I know some guys that do it and never let themselves get assigned.
it will be a bit more secure, however compared to wheeling it, less profitable. if you are doing underlying that you 100% like to own, it is better to get assigned and sell ATM calls. The 100% is the most important element in this trading strategy.
I’ve been assigned a few times and for me it’s more stress getting assigned. In my experience rolling down and out allows me to get out of that trade for profit (even if small) sooner than taking assignment. Less stressful when you can get out of a trade that is challenged sooner rather than later. Sometimes you’d have to roll out 2 or 3 months in order to not pay a net debit. But once the stock moves up you can always roll it up and in.
thank you for all the information you are putting out there Brad. I have a question, why did you choose 3-4 months out your expiration date instead of 45 days? arent you looking into the optin to buy it back in case it gets you 70% of your premium? would not be 45 days enough to take advantage of theta?
loving the CSP doing pretty well with MARA recently roughly 3-5% weekly. got burned a bit by Chargepoint waiting for the price to come back up so I can sell and start some CSP again.
This is a very informative video! I wish I'd seen it before I blew my first trade yesterday. I made a rookie mistake and lost $59.00. I'll chalk that up as a learning experience and thanks for this video!
Thank you Brad for yet another great live trading video. It would be nice if you could share some of your long calls (especially the 'BUYs') how they are doing as of date. Cheers
I do. I update everyone everyday on every single move I do with full explanation inside my discord. Other than that I have released about 5 LEAPS videos in the last month. Check out the channel
@@BradFinn I mean the same trade when you get a chance you can show, just for continuity later in your next video if possible for a quick review. I watched your leaps and so many other videos. Most of your videos already watched, no worries. Cheers
Thanks for the video. I've been doing CSPs the last few weeks on mostly short DTE SPY and making a nice return. SPY was up fairly streadily this week that I was able to close for a profit and sell more CSPs. The principles in the video age well, but PTON hasn't. Hopefully you were able to cut your losses. I'm not sure I feel confident enough in picking individual stocks, minus a few that don't pay good premiums, so I'm sticking with the indexes.
Hi, as I saw in your other video, selling CALLS is good If stock price remains flat or go down, can we also say selling PUTS can be good if stock price goes up?
Sorry in advance, but just discovered this video. PTON continued to fall and it's $8 now as opposed to your buy at $54. Did you end up liquidating the position or do you continue to hold?
I placed a CSP expiring on 11/19 at the $280 strike on UPST on Oct 21st when it was valued above $320. The stock dipped to $259 today. This will be my biggest loss since trading 6 months ago.
You could always just roll it out. Or, you picked $280 because you thought it was a good value right. So it should still be a good value unless you picked the wrong strike 🤷🏻♂️ I just roll my PTON another week out and got myself even more premium
@@BradFinn thanks, Brad. The $280 strike is digestible for assignment. I can wheel it. I also looked at rolling out but am uncertain that the stock will rebound. I am deciding on the best loss mitigation. One cannot “hope” for the stock to move in the right direction. Having a plan is key. Thanks for your awesome content.
Just now learning this stuff. Great vids. Very helpful. Question...You have a put for $55 for Intel, but the stock is trading at $51....How does that work?
I have a CSP for zm and roku. Both tanked and I have been rolling out the put for small premium. should I just go ahead and get assigned and average down then to sell cover call against it?
At 7:59 you mentioned that if the stock plummets below the strike price, you cannot write calls against it? Could you please explain why? Technically, since I got assigned, I am owing those stocks right? Why can't I execute the Covered Call strategy on it?
@@BradFinn I wasn't sure about the right term, hence the confusion. I watched your other videos and it was the "Wheel Strategy" that I was searching for. Thanks!! Your videos are amazing !!! Awesome content 👍
Though it's good to know the difference between a cash secured put and a covered call, it's worth mentioning that they really are functionally the exact same thing. Everything is just opposites. If you were to do a covered call selling and out of the money option, that is functionally the exact same thing as doing a cash secured put within in the money option. And vice versa.
Hi Brad, I really find great value in your videos. If I write a call with 90 days expiry, then the stock price hits the strike say on day 20 or so will they be assigned by the broker before the expiry?
Hey Brad, Great Video on a live Trade! One question I have is, why did your Buying Power drop around $3330 when I thought you only had to secure $1,750 less your Net Premium earned? I thought maybe you bought Two contracts, but went back and it was for One.
I don't understand the Open P/L and Day P/L. May I ask whether assigned or not, we get to keep the premium for CSP? What happens if the CSP is In The Money even bef expiration? Do we still incur P/L Loss even after assignment?
Does it only matter if the stock price is at or below strike price the day of expiration? Or could it be exercised if it drops below sometime during contract?
I really should stop my pmcc on amd, the calls i’ve sold have cut my profits from my leaps option in half. Csp’s and put credit spreads have been king for weeks
@@BradFinn So even if I sell a put three months out, I'll still keep the full premium even if I close it out few days later? Or I'll just have to pay a high debit to buy it back for a potential loss? Thanks!
Question: how does ons stay consistent in the “out of the money” gain? If I have to end up “in the money” more often than not.. then it’s gonna be hard to get the collateral every time
Basically let’s say you have $2000 collateral and you sell and the stock drops below the strike price and you end up buying $20*100 and spend all your $2000.. how does one prevent that and rather just collect premium and stay “out of the money” to prevent the buying of stocks.. I understand it should be stock you want but to be able to repeat and just collect premium.. more of them than buying stock
I was wondering if you think this is a good trade. I sold a $22.00 put for .47 for BBBY. I got assigned and the stock was dropping to $19 and change. I then sold a $22.00 leap call for $725.00. I don’t care if I have to sell my shares for $22.00. Do you think I did good collecting $47.00 and $725.00 in premium or am I missing something?
Could you explain why you trade 3months (5%ROI quarterly) expiration date instead of weekly (1-2% ROI weekly) CSP method? 3 months is pretty long period for holding the collateral?
I don’t know what you mean by “holding the collateral”. As I mentioned in the video the money put up as collateral is an investment that makes me an immediate return. As opposed to using that money to buy shares and have no immediate return
Selling puts with margin as collateral isn’t really a naked put but I can understand not doing it. Except that if you pick safer strikes with supper strong support you’ll make your returns on capital that you aren’t paying margin interest on. Again not for everyone but you can also close the contract at a loss just in case the trade isn’t going your way.
Not sure how you define it. But I was taught it’s a put that doesn’t have anything to back the terms of the contract with and underlying asset or cash www.investopedia.com/terms/n/nakedput.asp
@@BradFinn the collateral comes from your margin. And they actually only hold the strike minus the premium you collected or even less in some brokerages. I don’t qualify on any brokerage to sell naked calls (borrowed shares with infinite risk) or naked puts but I guess you’re right, an institution selling naked puts is probably still doing it with their margin as collateral. This much is true: csps are a nice slow rake great vid and topic
@@BradFinn did you explain why you do longer contracts on puts? I write weekly on my calls and also find weekly puts pay higher annual ROI. I check this by comparing the premiums on a daily pro rate. So premium/days open gives the per day premium. I find weeklies pay high per day. To determine AROI i multiple daily premium by 365 and divide by collateral. Of course this is rough as well. I actually figure i have about 300 trading days a year given days I don't trade at all, weekends, holidays and earnings season. So i actually base my AROI on 300 days worth of daily premium. Thoughts?
