Master this Unpopular Passive Income Stream
You may think you know this, but 90% of people don't know this…
Today I am going to show a skill I have that you can use as a passive income (very less amount of time required per day) which you may not know.
By the way, this is a part of our community Story Sprint Day 06.
Yesterday I wrote about a person I inspire. Here it is.
The Skill is Options Selling.
This is an advanced topic in Trading Options.
Last year, I have been writing about this, and I conducted 1:1 classes as well. But right now I am not actively doing it. But I am trading Options. The way I trade Options does not require much time, so I don't have to spend more than 1 hour per day in front of the screen, which leads me to do various other projects.
That is the reason I started building my personal brand on Twitter.
But in this post, I will highlight how I trade options as an option seller.
To become an Options Trader, the first thing you have to learn is how to balance risk and reward.
You may have heard about trading Options, most probably what they are talking about is buying options, but that is not how I do it.
I trade options, to collect the premium.
Think this way,
You are an insurance company manager, you get payments as premiums.
Meaning, I want to insure my car, I pay a premium upfront to insure my car for one year, if something happens to my car insurance company will pay the damage or fix it according to the terms and agreement.
But what if nothing happens to my car?
Do I get the payments back? no right, the insurance company keeps it (premium).
So, in this situation, as an options seller, you are the insurance company that can keep all the premiums.
Hope you got an idea of what I am talking about.
Anyways that is how I trade options.
So, you may ask…
Is Selling Options Risky?
Some traders stay away from selling options because of the risk involved and what you get in terms of profits is small compared to buying options.
When you buy options, the maximum risk is the amount of premium paid for the position.
With defined risk, some traders are more comfortable buying options than selling options.
The only times you will lose money when selling options is if you run out of buying power and are forced to close a position.
For that, you will need to learn how to manage trade, and take only specific trade with proper risk management.
Here are some related stories I wrote about Options Trading:
The “One” Options Strategy for Small Accounts
How to Trade Options Correctly
How to Trade Options like Collecting Dividends
How to Grow a Small Account Quickly with ETF Options
Ultimately, selling options requires more discipline, finesse, and patience than buying options.
If you want to play the lottery and risk losing money, buying options may be the right strategy for you.
However, if you are looking for the best long-term options trading strategy, it is time to learn how to profitably sell options.
I teach everything you need to learn about Selling Options in my Course.
In summary
This is a skill you can learn and earn money without spending much time.
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