Here's How We Attained A 100% Win Rate In 2017...
By selling put options, that's how.
I won't beat around the bush.
Selling put options is one of the highest probability trades you'll ever come across. And it's one of the greatest ways to increase your income, no matter what the stock market is doing.
You can make money by selling put options if the market goes up.
You can make money by selling put options if the market goes sideways.
And you can make money by selling put options if the market goes down.
You can't put the odds in your favor any more than that.
Usually in cases where the odds are stacked so much in your favor you would think the risks are very high.
That couldn't be further from the truth.
The reality is, put-option selling is very safe and conservative if done the proper way - by controlling every facet of the deal when making the trade.
The risk and reward are completely in your control, and you know all the details ahead of time before putting a penny of your hard-earned cash on the table.
So why aren't you doing it?
What is selling put options?
As a refresher, here's how it works:
A put option contract, when traded, will always have a buyer and a seller.
A put-option buyer is speculating that a stock is going to fall, and they will buy a put option as a way to test their prediction. And in order to place that bet (buy the put option), they will have to pay for it.
The put-option seller (us!) is the one who collects that bet and keeps it as his or her "fee" to take the other side of the trade, just like a casino would.
If the put-option buyer is correct and the stock falls to the desired level by expiration (all options have an expiration date), they can collect on their bet by forcing the put-option seller to buy the stock at its now lower price.
And this is where the great part comes in...
You as the put-option seller actually want to buy the stock at its lower price.
Here's why.
Let's say a stock is at $50 per share. You want to buy it at $40.
What can you do?
You can sell a $40 put option for its going price (fee) and collect it from the put-option buyer.
Since the put-option buyer thinks the stock will fall to $40, he or she is happy to pay you for that bet.
If the stock falls to $40 ($10 drop), the put-option buyer will force you to buy the stock.
And that's exactly what you wanted - to buy the stock at $40.
So what did you get out of this trade?
Three things:
1. You got paid upfront cash (fee) to take on a bet.
2. You got to buy a stock you wanted at a price you wanted.
3. Happiness!
What if the stock doesn't fall to $40?
Three things:
1. You still keep the upfront cash payment .
2. You don't get to buy the stock, unfortunately.
3. You can now sell another put option for the same terms and collect another upfront cash payment.
In the end, the stock can either end up where the put-option buyer needs it to, or it won't.
And a majority of the time, the stock won't cooperate with the put-option buyer.
This is how we achieved a 100% win rate.
We closed 27 put-option trades, and every single time, the stock didn't fall to where the put-option buyer needed it to.
So we kept the upfront fee 27 times and walked away with the cash, with never having to buy any stock during the year.
Even though we wanted to buy the stock at a cheaper price, it never fell far enough by the expiration date for us to be forced to buy it.
And that was okay, because at least we collected the upfront cash and pocketed the money, which really added up over time!
As I said at the beginning of this post, you get to choose all the details of the trade before putting any money at risk.
How?
1. You pick the stock you're interested in.
2. You choose what level you'd like to buy the stock (which is called the "strike price").
3. You choose the expiration date.
4. You collect the cash (fee).
You will only enter a put-selling trade that meets all of your requirements. No one is forcing you to enter a trade you don't want.
Winning with put-option selling means two things:
1. You're collecting upfront cash that pads your trading account balance.
2. You may end up buying a stock you want at the price you want.
So we won 27 times in 2017, not by buying the stock, but by collecting 27 fees. Pretty cool.
And we did this whether the market went up, sideways, or down.
If you're not selling puts, you're missing out on a fabulous way to earn money.
Come join us!
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Give us your comments.
-Lee
