Steady Monthly Income by, selling out-of-the-money near term options. | Pacific Trading Academy
Close

Steady Monthly Income by, selling out-of-the-money near term options.

Steady Monthly Income by, selling out-of-the-money near term options.
 

 

Out-of-the-money options, in the near term month, lose their premium rapidly as they approach expiration.  An excellent strategy to take advantage of this phenomenon is to sell these options.  Set-up the trade as seen below:

  • Sell options on non-volatile indexes like the small cap Russell 2000 index (RUT).
  • Sell options with a probability of expiring of < 10%.
  • Do not sell naked options.  Always have protection by buying an option further out of the money.  These strategies are called bear call and bull put.  Together they are an iron condor.
  • Place your trade 30-40 day before expiration.
  • Take profits or cut losses @ 6-10%/month.

 

 

 

Dale has perfected this strategy.  Click here to register for his Free Webinar on May 28th, 12PM EST to learn more.

 

 

Leave a Reply