Overview

Greetings, astute investors! Do you want to learn how we go about mastering Cash Secured Puts? Ever pondered the path to easy gains in the dynamic and stressful realm of investments? Well, gear up because on November 6, 2023, I executed a clever options trade – selling a Cash Secured Put against MicroStrategy (MSTR), and raking in a cool $4.89 per share as premium. Now, let’s delve into the intricacies of this tactic and explore how it could elevate your investment strategy. Quick disclaimer: this is financial education, not financial advice. Conduct your own research and cultivate your own expertise.

Explanation of the Cash Secured Put options Strategy

So, here’s the lowdown – the cash secured put option strategy acts as a covert weapon for investors. Instead of holding a stock and selling a call option, you’re selling a put option while maintaining sufficient cash to cover potential purchase of the shares. It’s a method to ride the market waves and pocket some cash through option premiums.

My Trade and Decisions Made:

Why MicroStrategy (MSTR)? This wasn’t a random selection. I delved into market conditions and closely monitored MicroStrategy’s recent earnings and understood that MSTR was a bitcoin proxy. Bitcoin is going crazy at present. The $442.5 strike price wasn’t a shot in the dark; it was a carefully chosen sweet spot between potential profit and risk. And that $4.89 premium per share? It represented a 1.1% return in one week or an equivalent staggering 57% annualized return. Who wouldn’t want that for just 10 minutes of work, right?

Fun fact: Warren Buffett executed a similar move, making a cool $7.5 million trading Coca Cola shares using this strategy.

warren-buffet-photo

Warren Buffett

Comparing the Gains:

Now, let’s talk turkey. Compare these returns to your regular term deposits, superannuation, 401K, or IRA plans. The difference is like night and day.

If you are interested, check out the latest on MicroStrategy (MSTR) stock on the Yahoo Finance website.

Tips to Make It Happen:

If you’re thinking, “I want in on this!” – great! But be smart about it. Research the heck out of the stock, look at things like volatility and market trends. Pick a strike price and expiration date that suit your risk tolerance and profit goals. Oh, and you’ll need a low-cost broker; I use Interactive Brokers, and if you use my affiliate link, you might even snag some free IBKR stock. It’s a win-win. Interactive Brokers (IB) is considered one of the better brokers for options trading and trading costs are minimal.

Conclusion:

To wrap it up, this cash secured put options strategy isn’t just a one-time win. My MicroStrategy trade is proof that with a bit of planning, research, and smart execution, you too can generate some serious cash. So, why not spice up your investment approach in 2023 and beyond? The potential for bigger profits is right at your fingertips! Continue to learn and expand your skills with respect to investment strategies and finding out additional ways to generate more income.

Your PROFITABLE ACTION STEPS this time around:

  1. Try to study and learn more about trading options.
  2. Focus on learning more about Cash Secured Puts. Try and trade in a test / sand box environment initially until you have the strategy mastered.
  3. Keep reading and learning. Find great investment books and knowledgeable YouTube channels. This will help you decide on suitable investment objectives and strategies.
  4. As always, do your research first and consult your own financial planner/adviser. I do not offer financial advice.
  5. Learn about another amazing Options Trading Strategy – Covered Calls – read here.

Stay safe, healthy and wise and most importantly of all, take ACTION.

 

 

 

Download My Passive Income Guide

To get the latest insights into Passive Income Opportunities

Passive income- ideas 2022 Guide

Your Guide is on its way to your email. If you can't find it check on SPAM or JUNK folders.