How To Sell Put Options Successfully: 5 Steps To Becoming A Pro...

Yes, another blog post on how to sell put options.

Why am I so adamant about teaching you this strategy?

Because it's just that good! And if you're not involved, then you're missing out.

The way that we sell put options typically gives us a 90% chance of winning (sometimes higher!). It's a great feeling when you can win that often. "Beating the market" is fun!

Here's what one of my members said:

I have been a follower of yours since your time at Walls Street Daily and Smart Option Seller. Under your guidance, 100% of your recommendations have been profitable. - Rejean G.

Now, if you've been reading these blog posts on a regular basis, you know that selling put options not only gives you an immediate infusion of upfront cash, but it also gives you an opportunity to buy a stock of your choice at a price of your choice.

Think about that for a minute...

You control your destiny with put-option selling.

My long-term goal in the stock market is to build a diversified portfolio of quality companies - preferably Dividend Aristocrats - that can give me price appreciation along with dividend payouts.

If you're unfamiliar with Dividend Aristocrats, click here for some great information. These are the creme de la creme of dividend payers who have raised their yearly payout for at least 25 years straight.

And if you really want to go the extra mile with dividend stocks, concentrate on the Dividend Kings - these are companies that have raised their dividends for at least 50 years. Incredible!

Here's another great resource to track all the quality dividend payers. When you get to that page, click on the Excel spreadsheet that lists them all.

So, if building a long-term, diversified portfolio of high quality stocks is your thing, like it is for me, then here's how I do it:

By selling put options on quality companies for a level in which works for me. What level is that? A stock price level much lower than where the stock trades today. And if I get to buy the stock at my price, then my portfolio is on its way to great long-term gains.

Here are the 5 steps:

1. Pick a stock you'd love to buy. Make sure it's high quality.

2. Pick the price at which you'd like to buy that stock.

3. Choose the length of the trade (expiration date)

4. Sell the appropriate put option and collect the cash.

5. Sit back and wait.

Very simple.

You must know going in, that you may end up buying some of these stocks - which is a good thing! But, you must also know that you'll have to pay for these stocks, so having cash to cover the purchase will be necessary.

A side note to this strategy, is that if you do it like I do, the chances of having to follow-through and buy the stock can be a very rare occurrence.


Because I want a super good bargain, and the prices in which I want to buy the stocks have a very low chance of coming to fruition.

You see, in order to actually buy the stock at a price cheaper than its current price, the stock must fall to that level by the expiration date. If it does, then good, you get to buy the stock.

If it doesn't fall, then you don't get to buy the stock. Your consolation? You keep the upfront payment. But that's okay. You know why? Because those upfront payments can add up to tidy sums of money over time.

Here's what another one of my readers had to say on that such subject:

Thanks for another great year. I have been with you since day 1. This year I made $59,000 with 5 positions still open. - F.X.T.

How about we run through the steps on a hypothetical Dividend Aristocrat.

1. Pick a stock you'd love to buy.

Let's use Kimberly Clark (KMB) as our hypothetical trade.

Here's the current chart of KMB. It's currently trading near $135 per share and it's a Dividend Aristocrat with 47 years of rising dividends under their belt.

2. Pick the price at which you'd like to buy that stock.

Let's say you'd love to own it at a 20% discount to its current price - putting that level near $108 per share.

3. Choose the length of the trade (expiration date).

This step entails pulling up an option chain and looking at various expiration dates. If you have a length of time in mind, you can concentrate on that. The longer the expiration date, the higher the payout will be.

4. Sell the appropriate put option and collect the cash.

I've pulled up the KMB option chain for April 2020 (shown below). This is a six-month expiration date. You can choose any time frame you'd like. It's best to compare months to see how much each option pays out.