Options Trading. Simple. Repeatable. Profitable.

This first lesson discusses how to set up your trading platform to be the most simple and efficient possible for our strategy. The courses utilizes the Tasty Trades platform, however, you can use any platform and set it up as close to this layout as possible.

This lesson explains our first trading strategy, known as a Cash-Secured Put. This is a basic, low-risk strategy that we will use to earn income on day 1.

Additional explanations of Cash Secured Puts can be found on YouTube and by googling The Options Institute.

Vocabulary

Expiry Dates – A vertical column on the Options Chain that identifies what dates a contract will expire.

Put Options – Always found on the right side of the Options Chain

Call Options – Always found on the left side of the Options Chain

Delta – A “Greek” symbol that identifies the percentage likelihood you will have to purchase a contract.

Bid – The “premium” you will be paid for each of the 100 shares in the contract.

Strike – The price PER SHARE you will pay if you are assigned the contract (Stike x 100 = Cost)

Review and Send – Allows you to confirm or alter your trade before you submit.

Google Yield Collector to find the website.

Free Version

Calculators Tab

• Annualized Returns

Watchlists

• Wheel Strategy Stock List

• Wheel Strategy Dividend Aristocrats – 25 consecutive years

• Small Account Wheel Strategy

• Wheel Strategy ETFs List

Paid Version

• Both Stock and Options Journals

• Income Trifecta Calendar – Cash Secured Put, Dividend, and Covered Calls

• Dollar sign show % over or undervalued.

• Chart tells you Price Channel

Google Trading View to find the site and follow along.

Google Simply Wall Street to get started.

Annualized Rate of Return Formula

Premium divided by the number of days in the contract (gives you the daily premium rate)

Daily premium rate multiplied by 365 (the number of days in the year)

This total number divided by the strike price multiplied by 100

This is your annualized rate of return.

(p / d) * 365 / s * 100

premium / days * 365 / strike * 100

Annualized rate of return calculators can be easily found with a Google search.

We will get “Assigned” our contract if the price of the stock is below our contract strike price when the contract expires. Meaning, we will be purchasing and thus owning, 100 shares of this stock.

This is always a possibility when writing Cash-Secured Puts. If your goal is own the stock, but you wanted to get paid premiums while waiting for this stock to drop in price, then you’ve done that.

If your goal is to get paid premiums and not own any stocks, sometimes you must take ownership. However, the next module will explain how we can begin to be paid premiums again by owning this stock.

The entire strategy behind this “Wheel” strategy is to be paid premiums through the full cycle of a stock dropping, us purchasing shares, the share price rising, and us selling our shares.

Even if you want to hold on to these shares for the long term, you can still profit from earning premiums from them until you are ready to sell.

Get to the next module to learn about the Covered Call

The position tab shows the number of shares we own.

The trade tab shows the number of shares again, as well as our average “cost basis”.

Remember these? 

Expiry Dates – A vertical column on the Options Chain that identifies what dates a contract will expire.

Call Options – Always found on the left side of the Options Chain

Delta – A “Greek” symbol that identifies the percentage likelihood you will have to purchase a contract.

Bid – The “premium” you will be paid for each of the 100 shares in the contract.

Strike – The price PER SHARE you will pay if you are assigned the contract (Stike x 100 = Cost)

Review and Send – Allows you to confirm or alter your trade before you submit.

Figuring out your return on investment is the same as with Cash Secured Puts. Refer to Module 3, Lesson 2 for a review.

Also, let’s take a quick look at Yield Collector again for its Covered Call Compare Calculator. This calculator is a feature for premium members only but is just one of many useful features you can get with a membership.