Earn Extra Income From Washington’s ‘Political Theater’

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But before you jump into the first options trade you find, be warned that buying options can be a risky proposition. According to our research, close to 80% of all options bought expire worthless. That means nearly four out of five people who buy options contracts lose money in the process. Naturally, these kinds of odds scare most investors out of even considering options.

Yet if you read the preceding paragraphs carefully, you’ll notice I said we recommend “selling” options, not buying them. A little reverse math tells us that if four out of five options buyers are losers, then by transitive property over 80% of all options sellers must be winners.

That’s one reason Amber Hestla focuses her newsletter on selling put options. By selling put options, Amber is able to capitalize on volatility in the market while also mitigating much of the risk of being in an options trade.

So far, Amber’s strategy has worked well. Of the 25 trades she’s closed this year, all of them have been winners — giving her (and her subscribers) a perfect 100% win rate.

Yet selling put options isn’t without risk. As an options seller, you could be obligated to buy shares of a stock if it falls below the strike price of the option. For example, if a stock falls 13% in a single day on news of a federal investigation, investors that sold puts might be required to buy the stock for more than its current price.

But Amber’s strategy has an answer to that potential problem. As she explained in a recent essay on selling options:

“I always make sure that I am selling options on stocks I wouldn’t mind having in my own portfolio.

“When this happens, I get the opportunity to buy shares of a company I want to own anyway — just at a lower price than the market was offering when I sold the put. I’ll even know the price upfront before I enter the trade.”

In other words, selling put options on stocks that you otherwise wouldn’t mind owning is a way to buy shares of a stock that you already like and at a discounted value.

But as I said earlier, this is a rare occurrence. In Amber’s experience, more than 80% of options expire worthless, meaning the seller doesn’t have to buy the shares, and the Instant Income they receive when selling puts is pure profit.

So if today’s political environment has you sitting on the sidelines, consider selling puts like the ones Amber recommends in her premium newsletter, Income Trader. Since her first issue in February, Amber has posted a perfect 25-for-25 track record. But more importantly, she’s helped readers collect massive amounts of Instant Income. Click here to learn more.

This article was originally written by Austin Hatley and posted on ProfitableTrading.

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