Generate Wealth Online with Put Option Investing

The stock niche is actually only one of the many popularly accepted procedures to make money.

Inside the securities sector a very very rewarding solution to build up money is options trading. I personally make 15 t0 20% just about every month by trading options, more specifically put options.

Currently there are typically 2 points to put options investment.

There is the actual facet relating to protective cover on ones balance also known as getting insurance for your stock, and then there is the wealth building, monthly cash flow side aka getting paid to own a stock. Why don’t we have a quick peek at both of those.

Buying Insurance with Put Options

Being the owner of the particular put options contract, you’ve got the “option” to offer the stock at a certain price up until you sell the actual option or perhaps the option expires.

Almost all investors make use of puts to protect their accounts from big movements to the downside and additionally lock in profits.

For instance, let’s imagine a trader bought a stock and it increased in price by about $10 per share. This is definitely a substantial move.

Now the question you might be asking is…should you take profits or let it ride? In addition, you need to take into account that should you choose nothing, your earnings could be destroyed in minutes with some not so great. Taking absolutely no action is probably the most detrimental actions to take within the stock market.

So What do you do in that situation?

You can aquire a put option with a strike price which is a number of prices below the current price of the stock. Using this method, it is possible to sell your stock at this strike price regardless of what happens to the price of the actual stock. For instance, if you purchased the stock at $200 and it increased to $250, you may buy the put at $240. With the $240 put option, regardless of how low the stock goes, you can still sell it at $240! So, if the stock drops to $30 per share, you can STILL sell it at $240, think about that for a second…let it sink in.

Making Monthly Passive Income with Put options

On the other hand of this put options coin is the way you may build wealth with options through passive income each month.

In order for the stock buyer to secure his stocks by buying protective puts, he needs someone willing to sell those put options to him.

I generate income each and every month by simply selling put options against stocks I’d personally be willing to own and sometimes even against stocks that I never plan to own.

One of the keys if you want to building wealth with put option selling is always to sell puts for stocks you will not mind buying and to also try to look for stocks which are relatively flat with regards to their price goes. Flat stocks are usually stocks that move not more than $3 in a month and possess really low PE ratios.

I find that I also have a great deal of success by stock trading in the $20 – $30 price range. Anything higher or cheaper is commonly too risky in my opinion.

If you’re ready to get started with your options trading strategies, then visit http://easyoptionstradingstrategies.com/ to find the best advice on trading options online today.

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