Market Update And Friday Q&A
Market Update Hello Smart Option Sellers! Happy Friday! I'd like to welcome some of our newer members to The Smart Option Seller family. If you've recently joined us, take some time to read through the Archives which you can find in the Members-Only section of the website. This will give you an idea of how things operate and what kind of trades we get involved with (put-selling, of course!). You should check the Current Portfolio for our open positions too, which will give updated stats on each trade. You can decide if you want to enter, if they are still viable at that time. As of now, we have a few trades that you can still get involved with if you don't already have a position. At this point, you will most likely be able to get in at prices better than our official entries. For those of you who already have a stake, I don't recommend increasing your position size unless you want to. If anything, you can look to use a lower strike price on the put option to give you more cushion against potential future downside action. Remember, option prices fluctuate up and down just like stock prices do. We can see our put option positions move into and out of profitability over the life of the trade. This is no cause for alarm. For some of you who may have never traded options in this fashion, it can be enlightening and eye-opening to see how the trades work from inception to conclusion. The good thing is that we have time and probability on our side as far as the trades working in our favor. For any of you who were with me back in The Instant Money Trader days (my service from 2008-2016), we never once had to fulfill our agreement and buy the stock at expiration. Part of this was due to the stock either never falling to strike price level, and part of it was due to us taking defensive action on the position and "rolling" to a more conservative position. The latter move being taken mainly because our members would rather not take ownership of the stock. The end game of put-selling for many people is that they can buy a stock of their choice at a price of their choice, that they agreed upon at the outset of the trade. With Smart Option Seller, maybe we'll end up buying shares of stock this time around. Don't know yet. We can always take the defensive action too and keep rolling the trade. Don't worry if you don't know about "rolling" yet. I will explain it if we get to that point. But, if we do take ownership of stock, the silver lining is that we now have an opportunity to hold for unlimited upside gains. What's wrong with that? Nothing else to report on our positions at the moment. With put-selling, there's lots of just waiting around to see what happens. It's a very passive form of trading. Continue to hold all trades as-is for now. Friday Q&A Q: Lee, I am having trouble with coinable.com in sending them my ID! Any suggestions? What is and how safe is GDAX? I am having trouble with coinable in sending them my ID! What is GDAX? Is it safe? A: Yes, another question about buying cryptocurrencies, specifically bitcoin. I've talked at length about bitcoin a few times here in the alerts, and actually am very enthused about the subject. I'm still gaining knowledge myself, so it's still a learning curve for me. In order to buy or sell these coins, the easiest & safest way in the U.S. is to open an account at Coinbase.com (not coinable.com). Unfortunately, I have no control over what their requirements are to open an account, so I can't help in that regard. Most of the exchanges like Coinbase, ask for you to upload a picture of yourself in the form of a driver's license. I had to do it too. It's just another layer of security and protection. My best advice would be to try and reach out to their customer service. I know they've been expanding their support level as the number of new people signing up on a daily basis has just been incredible. The word is getting out about bitcoin! As I said in previous alerts, I am currently invested in bitcoin and some of the other cryptocurrencies, and will continue to add to my positions. This is not a recommendation on my part to you. I want to be upfront and transparent about that. I truly believe investing in these currencies can be a once-in-a-lifetime opportunity. Now, GDAX is another exchange where you can buy or sell cryptocurrencies. It is owned and operated by Coinbase, and has a slightly different platform to use. In order to use it though, you'll have to open a Coinbase account first. I actually like trading on GDAX better because they don't mark-up the price you pay for the currencies the way that Coinbase does. You can transfer fiat money & crypto coins between your Coinbase and GDAX accounts instantaneously. This is what I do. Both Coinbase and GDAX are safe and insured. My advice to everyone, if you want to get involved, please do your own due diligence and read the help files on these exchanges. I can give you as much information as I have, but please don't consider me the final voice of authority on the subject. If you get involved, use part of the most speculative funds that you have, and consider it a fun way to have an opportunity to really hit it big with something that I believe is going to be massive in the next few years. Here's the referral link again if you want to open a Coinbase account. Why pass up free bitcoin? We'll each get $10 worth after you fund the account with $100. If you want more general information about cryptocurrencies, here's two sources that I use: coindesk.com & coinmarketcap.com Q: Lee, what if I decide that I want to get out of a put-sell position I've sold and decide I no longer want to be in the trade? Do I have to wait until expiration for that? A: No, absolutely not. If you ever want out of an option trade, you can unwind it at any time you wish. It's just like a stock trade - you can come and go as you please. Now, if/when you decide to get out, there's no guarantee you'll walk away with a profit. Depending on where the stock is trading at that time, and how much time is left before expiration, will determine the price you'll pay to get out of the position. And when getting out, you need to buy back the same exact put option that you originally sold. You can't buy one with a different strike or a different expiration. That doesn't do it. Just making sure everyone knows that. Q: Lee, why is it that put-selling has such a high win-rate? Most stock trades don't even come close to that? A: Good question. It all depends on the way you structure the put-selling trades. There are some systems that will have a low win-rate because they focus on the wrong stocks and/or the wrong strike prices. The reason why we win at the rate we do is because we focus on strike prices well out-of-the-money (OTM) and on stocks that are very stable and high quality. You give up a little something in the form of the premium you receive when choosing the strike prices we do, but that's part of the plan. We like the slow and steady pace of consistent winning trades. If you sell put options on high flying stocks with lots of volatility, sure you'll get more money upfront, but you'll also expose yourself to having to buy these stocks when you might not really want to. Our system typically chooses strike prices that are 15%-30% OTM with two to five months before expiration. These usually pay out between $.25 - $.35 per contract. That's the sweet spot for us and it is why we continue to have such a high win rate. Our model portfolio holds ten contracts at a clip, and when you do that on multiple stocks, multiple times throughout the year, you will end up with a nice chunk of change before you know it. We have members who trade only one contract per trade and some who trade 100 contracts. It all depends on your portfolio size and your risk tolerance. Hope that helps answer your question. That's all for now. Make sure you send me your questions so we can all benefit. Continue to hold all other trades as-is. Check the Current Portfolio below for updates & instructions. You can always reach us here Have a great weekend! Regards, Lee Let's Grab That Cash!
Current Portfolio Continue to work all other trades as instructed and continue to hold all other open positions as-is. See the Current Portfolio below for current prices & instructions. Note on the Current Portfolio - if you are a new subscriber and don't have a position yet on any of our trades, make sure you enter your order at the original recommended sell prices. Do no enter any order unless the current option price is at, or higher, than the official recommendation. If you are unsure or have any questions, please ask us!
Bitcoin If you want to grab a stake, you can sign up at Coinbase.com Use this referral link to get started. If you do, we both will receive $10 worth of free bitcoin after you've bought your first $100 worth. Don't forget, if you do open an account, make sure you use a very long & intricate password. And sign up for the "Two-Factor Authentication". This is just another layer of protection for your account. It will send you a 6-digit code to your phone to use for logging in purposes in addition to you typing in your password.