Hi. My name is Kevin Smith, and I am an options-based trader and value investor.
In my 20s I moved to the “Big Smoke” and spent several years working in the private-equity research space at London Bridge.
It was fun, for the first year or so, but having always had an entrepreneurial spirit I wanted something more.
While in London, a childhood friend from my hometown, whom I’ve known since primary school, offered me a business opportunity to create our own line of sports supplements.
This prompted me to quit my corporate job at age 26 and move back home to fully commit to building a sports supplement brand.
9 Years Later
Fast forward 9 years later and during this time we had launched a spin off brand in the protein bar space.
This was doing better than the supplements side and in October 2020 we sold it for a little over 7-figures.
It was during this time in my life that I really started to learn more about investing and trading, after finally having some capital to deploy.
Side Note: Supplements and protein bars might sound like an attractive business but margins are tight, so you have to sell a ton of volume to make a decent return. We were selling over a million protein bars a year but my bank balance didn’t reflect much success.
In October 2021, a year after selling my protein bar company, my business partner offered to buy me out of the supplement brand we had started together.
I was looking for a change in my life, and he presented me with an offer that I eventually agreed to.
Unfortunately, even after selling my second business, I was still unsure about what I wanted to do. I believe this is a common sentiment among many entrepreneurs who ultimately sell their company.
You wrap your identity up around your business, do it for nearly a decade, and then all of a sudden — it’s gone.
I didn’t want to sit idle, so I promptly joined a startup in a different industry with a guy I knew from school.
I won’t delve into the details, but it was a messy and emotionally draining experience.
Despite having more money than ever before, I found myself, for the first time in my life, feeling lost, confused, depressed, and desperate for a change.
My Dream For Passive Income
Ever since I was a teenager, I would read as many things as I could about passive income and building up multiple of these income streams. It was, for me, the holy grail of financial independence and securing a future free from the constraints of traditional employment.
During this transition in life from leaving the start up, I had witnessed people talking about covered calls on twitter and making a monthly income each month and calling it passive.
Excited by this, I managed to find and connect with an older gentleman online that was an options-based value investor and lived locally to me.
He had 25+ years experience and ran an intense 13 week course that I enrolled on. I completed the course in 2 weeks and he continued to mentor me afterwards for a brief period.
He equipped me with the ability to:
- Generate regularly monthly dividend-like income
- Make money in an up, down or sideways market
- Adjust the cost basis of my shares allowing me to buy them at a discount
- Lead me to financial independence
Once I had acquired these skills, my life has never been the same.
Option trading has granted me the freedom to be present at home with my wife and son. It enables me to handle daily school responsibilities, visit the gym on my own schedule, spend time with family at my convenience, and take vacations, albeit now aligned with children’s school holidays!
I now blend a long-term investing approach with conservative short-term option trading, and the outcomes have been remarkable.
Option trading is something I love and will be doing it for the rest of my life.
Born Out Of Misery – Dividend On Fire
Being a UK-based options investor, finding real-life resources in this niche is quite challenging. My mentor has officially retired, and I don’t know anyone else who trades stock options in the UK.
People often assume that options come with high risk. However, here’s the surprising part: selling a covered call or cash-secured put on a stock is actually less risky than just outright buying that stock.
Yes, you read that correctly.
The sale of the option not only brings in a premium, but it also reduces the risk in owning the shares. Selling options allows you to acquire world class businesses at lower prices than what every other Tom, Dick or Harry has paid for them.
Only a few grasp this concept, but once you do, it truly changes the game.
So, after facing a shortage of readily available information on this subject, I chose to start documenting my options trading journey and begin writing what strategies I was using and how I approach selling options.
This has evolved into conducting interviews with other accomplished options traders, which has been both enjoyable and a valuable learning experience.
NEXT POST: The Art and Science of Selling Options