For starters, you can sell delta 10 20 for either weekly or monthly puts. I usually close around 80% profit. Most brokers give 2x to 4x worth of leverage based on portfolio value so just have to keep the risk ratio controlled to prevent auto liquidation incase the options gets too itm.
Information overload hahah that goes to show just how much I don't know about options! Very insightful video and I love the dynamics between you guys! Great interview both!
Hi Kelvin, can you share more about leaps strategy? Have u tried it before? Also, for selling puts, besides tsla/pltr/riot, which stocks do u sell? Personally, I sell like to sell PLTR, nio, and maybe Li, these
Thks for the info. There are really many things to learn. I wasn't too sure abt the roll functions until only lately. Otherwise i would have bought more time by rolling than exercising my put upon expiry.
Hi Kevin, example: Sold put with strike at $295, expiring in 30 days. Price dropped to $280. Do you close the trade, roll it to lower price and to a further date or wait till expiry date. Thank you.
Thanks Boon Tee and Kevin for the sharing. Would like to check with Boon Tee on usually how much % of stock amount you would use/limit as collateral to sell the naked options. Noted from Kevin past video that he limited to 20%. Reason of asking is because I have been selling naked option for the past one year, and using around 50-60% as collateral. I have received margin call once because my portfolio stock price crashed and the collateral is not adequate. Hence, would like to have some sensing on others preference on above.
Thanks a lot for the question! I don't have a straight forward answer as I don't really know how you calculate the amount used as collateral. I am currently using IBKR, so my entire portfolio in IBKR will be used to support my options, I just need to make sure that the maintenance margin is met at all time. Options is only very small part of my portfolio. For instance my portfolio is ~sgd400k, and I currently have 4 put options on TSLA with maturity of around one week, and the strike level is very low compared to current share price. So the risk of liquidation is extremely low.
The thought to avoid company with Low IV is wrong. I suggest playing put options on fundamentally strong company so If you get assigned It’s fine because you know the company has high growth and you can hold or sell call options. Playing with high IV stocks is dangerous although premiums can you make you (wet) with assignment you will be screwed if the stock starts crashing.
12 years in financial industry and rate himing 6 out of 10. And kelvin not in finance industry and he rate him higher. Either he is over humble or really cmi.
Just felt there are so many things that I don't know. For instance, options can be quite complicated, basically you need to understand how options work, and you need to have good technical analysis skill or sense on the market in order to form opinion on short-term trend. I don't want to give peoples impression that making money using option is easy.
Have you ever thought of selling naked put in the money and use the put premium to buy more call to be 100% leverage when you are confident that the share will go up ? Especially when the stock is at the hyper oversold region...
Kelvin, You are very informative and explain in simplified way. Just want to ask you, I have IBKR, and received message for MSFT US stock dividend. How they deposit our dividend since our own account is Singapore DBS bank. How to check this amount deposited and do we need to pay tax or they deduct already.
To have a good night sleep, keep a 25%-30% price gap between the current price and your strike price. Or you can find your own level of comfort through experience.
After listening I would like to do cash secure put for tsla. Can you teach me how to do it? I have the cash and really want to own Tsla through option.
If after selling a put for 30 days expiry, if the stock goes up in share price and you hit 75% of the premium in say like 2 days, can we close it. Any impact ?
Nice sharing, gentlemen.. do you have some general rule of thumb percent gain on when to buy to close your written options? some people say 50%. I normally stick to 50% but ready to go for higher percent when there are some crazy moves. also wouldn't it be great to sell options close to earnings with expiry on friday after earnings since there is high IV. the premium goes up with high IV and then IV crashes after the earnings.
Hard to offer general rule of thumb because need to constantly reassess the outlook. For instance, if I expect that the share price might drop, then I will wait first. If I foresee that the share price might go up, then I will lock-in the premiums first by rolling. Trying to predict the movement is essentially trading (or gambling) so have to keep this part small. Main strategy is still owning stocks as time will be our friend.
Option is really good for earning extra income. I personally has been selling monthly cash covered puts on stocks I don't mind owning at the strike price I determined. Anyway, thanks for the video!
Thanks guys for the video and for sharing your insights. I know absolutely nuts about Options Trading and therefore I am entitled to ask any noob question and be forgiven. From what I have been hearing in this video and your other videos as well as the videos of the other RU-vidrs, it seems like every good Options trader will want to sell PUT Options on a good bullish uptrend stock which by definition being bullish will therefore have a low probability of retracing to the Strike Price which then makes selling such a PUT Option to earn the premium as easy as betting a sum of $10000 that Spore will not experience an earthquake within the next 30 days. That being the case, then why would any other Options trader want to or need to buy such a PUT Option since the probability of an earthquake happening here within the next 30 days is almost zero. It will be wasting money to buy insurance to guard against an outcome which will most probably not happen. And needless. Just like buying insurance to bet that the Singapore Lions will not make it to the next World Cup Finals. This one no need to buy insurance at all. Triple confirm they wont make it one. Not just for the next World Cup. But forever. So my point is - if every good Options trader will do the same thing, ie. sell PUT options on bullish uptrend stocks which is the almost Bao Jiak bet, then which Options trader will want to take the other end of the bet ? Sorry I wrote so little. [GRIN]
Hi kelvin, any idea which platform i can use to do options but not with one lot (100shares) requirements because i am a broke man. Since we mentioned to sell puts on stocks we like, generally their share price is relatively high.. thank u for sharing and great video always👍👍
When I sell naked put option in tiger, the stock price drop and I’m on high risk exposure. Tiger liquidate my others stock. May I know how to avoid this?
Its just closing the current option at a loss, then sell a option to cover the loss. Can check out this video ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-8AG4IvJB4Dc.html
Hi kelvin. Im thinking of trading put options on amazon stock. Im looking at strike price of 3000. (Stock never falls this low nearly 8 months now). I think it is lower then 0.3 delta. Maybe 0.2. It is a premium of about $1k. Im using margin to fund account. Is my understanding correct that each month i can collect 1k as income doing this.?
Tastytrade found out that monthly has the best risk reward. I started with weekly, but changed to monthly now. I think bi-weekly is possible, just try it first, you can adjust accordingly
