Can you imagine the satisfaction of consistently generating an additional monthly income stream from learning how to sell stock options?
Options Selling Roadmap 🗺️
📍 You Are Here
>> You’ve heard of selling options, covered calls, cash-secured puts, the Options Wheel Strategy, but you don’t know where to start?
>> Are you frustrated with other people making passive income from selling options and feel you could learn this skill as well?
>> Do you dream of making an extra side income, or better yet, leaving your 9-5 to trade options full time?
>> Would you like to learn how to grow your hard-earned investment portfolio by 12-24% each year or more?
And if you’re already an experienced trader – and before you bounce from this page – I want to stress that this course is not a fluff piece or the same generic options training drivel you read all over the internet or hear about in YouTube videos or even get “training” from your online broker.
Retail Investors Face A Tough Challenge
🚧 The vast majority of non-savvy retail investors face significant challenges in the stock market, putting them at a huge disadvantage. Wall Street operates, primarily, to serve large institutions rather than individual investors. Consider that:
🚧 Most actively managed funds fail to match broader market returns annually.
🚧 Fund managers are paid based on assets under management, not performance.
🚧 Index funds provide diversification but include poor performers. They guarantee you mediocre results.
As Brian Wilson from The Beach Boys said: “Beware the lollipop of mediocrity; lick it once and you’ll suck forever.”
So if we reject index mediocrity—then two suboptimal choices remain:
1/ True long-term investing requires decades to build wealth.
2/ You could try to become a stock trader to accelerate results but risk blowing up your account in the process. I spent several years trading breakouts before finally discovering selling options as a superior method of beating Mr Market.
The core dilemma is that conventional approaches peddled to us over decades either take too long or carry too much risk.
A Powerful Blend: Dividend-Growth Investing with Selling Options
My mentor preached this strategy.
He used to say, what if you combined the best aspects of long-term dividend growth investing and short-term conservative options selling using the Options Wheel Strategy?
The outcome changed my financial life. This blended approach means you can:
In essence, selling options lets you take calculated risks, we pick and choose the stakes, we’re never in a hurry, and we always have an edge. Mr Market doesn’t stand a chance.
Today I am a full-time options investor and trade the options wheel strategy as my day job. I say full time but in reality, it doesn’t take much time at all once you understand the basic principles and develop your own trading plan and style.
In the introductory welcome email, I share my background and journey into full-time stock options trading. We cover some basic concepts and I explain how selling options on stocks you want to own is less risky than outright buying them. We also go over how selling options can be used as a tool for managing risk.
This lesson covers a detailed guide on cash-secured puts, explaining their definitions, in-the-money vs. out-of-the-money scenarios, and the strategy of selling puts to acquire stocks. I emphasize the benefits of this approach, including lower cost basis, flexibility, and the potential for additional income through other option strategies that are discussed later. I will show you the mathematical advantage of selling cash-secured puts over buying stocks outright. It concludes with tips on placing put trades, introducing key terms, and offering insights into the next topic, selling covered calls. This is a comprehensive resource for those interested in understanding and implementing cash-secured put strategies to earn extra monthly (or weekly) income.
This section provides an in-depth exploration of covered calls, likening them to a rental property that generates monthly cash flow. I emphasize covered call investing as a method for consistent dividend-like income, accessible to anyone who holds 100 shares of a stock (US listed) or 1000 shares of a stock (UK listed).
This section delves into the intricacies of option trading, specifically focusing on options chains, pricing, liquidity, and the Greeks. I provide valuable insights by reviewing an options chain for Tesla (TSLA) and British Petroleum (BP), explaining key elements such as strike prices, bid-ask dynamics, and time value. Practical examples of selling puts on BP and TSLA are discussed, outlining premium collection, breakeven prices, and potential returns. Additionally, we touch on options volatility and pricing, emphasizing the importance of understanding intrinsic and extrinsic values. I simplify the complex topic of the Greeks, highlighting the significance of Delta and Theta in shaping options selling strategies. Overall, this section of the course offers a comprehensive yet accessible overview of essential concepts for successful option trading.
This section explores the critical aspects of position sizing and money management in options trading. Emphasizing the necessity of a well-defined money management strategy. Diversification is discussed in terms of position size, strike price, and expiration, offering practical insights and personal experiences. I encourage Roadmappers to carefully consider their risk profiles, providing a balanced perspective on constructing portfolios and managing positions effectively in the dynamic world of options trading.
This section of the course provides an in-depth exploration of the considerations involved in choosing between selling weekly or monthly options. I share my journey in initially starting with monthly options, experimenting with weekly options, and ultimately returning to monthly options. The content discusses the benefits and drawbacks of both options, offering insights into factors such as annualized returns, flexibility, time decay, and trading frequency.
This chapter in the course delves into crucial aspects of options trading, comparing the advantages and disadvantages of the UK and US markets. It touches on key factors like market development, liquidity, stock familiarity, and trading hours. The content provides valuable insights into considerations for potential traders, ensuring a well-rounded understanding before making informed decisions.
The focus—in this lesson—is on the crucial concept of adjusted cost basis and its significance for investors. I explain how to calculate adjusted cost basis. We then delve into how options traders, unlike regular stock investors, can strategically lower their cost basis using techniques such as selling covered calls and cash-secured puts. I cover detailed examples of how writing puts and using covered calls can effectively reduce the average cost per share over time, offering a perpetual rebate on shares and enhancing profit scenarios. The strategy of Buy-Hold-Adjust is introduced as a safer approach to incrementally lower cost basis. I also discuss the accounting choices regarding premium income and the importance of consistency in reinvesting premiums to compound returns. Overall, this serves as a comprehensive guide to thinking about options a little differently than just an outright premium collection that is pushed by tutorial brokerage videos and generic info you read online.
In this tutorial lesson, the focus is on technical analysis. I go over three main indicators that I use to stack the odds in my favor when writing puts and covered calls. The lesson emphasizes the simplicity of using these indicators to cut through market noise and understand shifts in supply and demand. The explanation of Support and Resistance as checkpoints or speed bumps provides a clear analogy, and the importance of these levels flipping roles is underscored. The RSI’s role in identifying oversold and overbought conditions is discussed, linking it to options trading strategies such as selling puts and covered calls. The MACD Histogram is introduced as a timing tool, with a focus on its trend and correlation with option trade outcomes. The lesson concludes by highlighting the powerful synergy of aligning all three indicators, creating a sweet spot for put and call selling opportunities. I share real actionable criteria for consistently identifying advantageous trades and encourage Roadmappers to use the provided information for generating consistent profits from their options trades.
In this lesson, the focus is on the crucial concept of annualized returns in options trading.
It emphasizes the importance of efficient trade management and introduces the annualized return metric as a key tool for deciding when to close cash-secured put options or covered calls. The email-based lesson and video provide a trade example to illustrate the impact of closing a position early to boost your annualized return. We explain the calculation of annualized returns, targeting a range of 12-24%, and encourage traders to consistently monitor this metric for every completed option trade. The flexibility of options trading, allowing for personalized exit rules and quicker capital redeployment, is highlighted. The lesson concludes by discussing hard and fast rules for closing positions and the significance of assessing the annualized yield left on an open trade to make an informed decision on when to close it early. This is powerful stuff and once you understand it, you can begin to start making much smarter decisions on your options trades.
In this lesson, delivered via email, the focus is on managing in-the-money put options.
I share a strategy for handling such situations, emphasizing the importance of waiting until most of the time value is gone before taking action. The preferred approach is to “walk down” the position by rolling down the strike price further out in time, aiming for a net credit and prioritizing any credit that reduces the book cost.
I share insights from a past trade where a put-selling trade faced challenges due to unexpected market events, demonstrating my commitment to a campaign mode approach for increased flexibility in managing trades over time.
I show you how adjustments, rolling positions, or taking assignment of the shares and selling covered calls can contribute to reducing costs and generating returns even in challenging situations.
The lessons learned include the benefits of a campaign approach, leveraging periods of high volatility, and actively adjusting trades through various options strategies. The lesson concludes by highlighting the dynamic nature of cost prices in options trading and expressing the ability to manufacture wins through strategic adjustments.
In this lesson, the focus is on managing out-of-the-money put options.
I highlight the typical strategy of selling out-of-the-money puts at a calculated strike price and waiting until expiration. However, I also introduce the concept of “grabbing a fast profit” when the share price rises rapidly.
If the put option’s value decreases due to the rising stock price, option sellers can buy back the original put option at a lower cost, eliminating the obligation to buy the shares at the agreed strike price. This maneuver results in a higher annualized return, a favorable outcome for option sellers aiming to compound their accounts quickly.
I reference and recap the annualized return calculator discussed in an earlier lesson, emphasizing its utility in deciding whether to close the original short put position and open a new one based on the remaining premium and time left until expiration. The lesson concludes by encouraging Roadmappers to assess whether there are better put-selling opportunities, reinforcing the proactive approach to managing option trades.
In this lesson, the focus is on managing in-the-money calls within the context of covered call strategies.
We begin by explaining that in-the-money calls occur when the strike price is below the current share price and outline three options when faced with in-the-money covered calls.
We also address the scenario where covered calls are in the money and the shares are massively underwater. I share a personal experience with a stock that went against me in a big way, highlighting the importance of patience and selecting an appropriate delta for covered calls.
The lesson concludes by stressing control over risk management and the need to use options as a risk dial rather than a binary on-and-off switch.
In this lesson, the focus is on managing out-of-the-money covered calls.
I start by explaining the concept of out-of-the-money covered calls, emphasizing that these occur when the strike price is higher than the current share price of the underlying stock.
I outline three scenarios of what you can do when a covered call is out of the money.
The lesson provides a warning about implementing the rolling-down strategy in high-beta stocks with short-term market swings.
In this lesson, the focus is on choosing a broker for options trading.
I discuss several brokers that Roadmappers may consider, emphasizing the importance of assessing the pros and cons of each to find the most suitable one based on individual requirements.
I suggest opening one or more demo accounts with the chosen brokers to familiarize oneself with the platform and practice trades in a risk-free environment before investing real money.
In this lesson, I show you how to place your first put and covered call trades including how to roll a position.
In this lesson, I give you access to my Options Campaign Manager spreadsheet and show you how to record your trades.
Bookkeeping is really important and you should treat selling options much like running your own business.
I made over £7k in July, 2023
>> And I’ve gone on to make on average £5k every month in 2023!
>> Whilst some stocks have moved sideways for months I have still been able to collect decent premiums from writing puts and covered calls.
>> My target monthly returns are between 1-2% every month, but sometimes I exceed this number by closing positions in an abbreviated time frame and I show you exactly how to do this in the course.
Successful people are trying to compress time and go faster.
🚨 You DON’T need another mediocre course, heavy on lecture and light on practice.
You need an Options Selling guide that:
>> teaches you WHAT to do and WHEN to do it, and WHY you are doing it, so you’re not wasting time on the wrong stuff.
>> quickly SHOWS you how to use a strategy so you can begin making money immediately after the course is complete
>> keeps you up to date on future strategies, methods, and stocks to consider selling options on via my newsletter (you get access to this after joining the course).
Meet Your Navigator 🚗
and I’m OBSESSED with options trading!
My wife and friends have imposed a ban on me talking about it
But, nothing could stop me from quitting my consulting job to pursue it full-time!
Turning my trading into a full time job makes me so happy, and I want the same for you!
That’s why I don’t hold back any tips or strategies. It’s why I share EVERYTHING I do and why I do it, so you can do the same!
You May Be Thinking...
“Yeah, ok, Kevin.
I’ve seen plenty of Options courses. Why would this be any different?”
I’ve achieved success WAY faster than most options sellers. Not because I’m super special – but because I was mentored by someone with 25 years of experience. Now I have taken all of these learnings, along with some of my own, and compressed them into this course.
That is why the Options Selling Roadmap is the ultimate bucket list skill to pick up for anyone who wants to earn money for life and be able to do it from anywhere.
Introducing: The Options Selling
Here's What You Get With The Options Selling Roadmap:
Beginner to advanced guides on every topic that moves the needle and allows you to start making money.
Actionable strategies to scale your portfolio and passive income, and when to do each step.
All This (And More!) Is Yours With The Options Selling Roadmap:
Short videos so you can absorb the content in a digestible way
Actionable steps that you can implement straight away and get rapid results
A copy of my Options Campaign Manager spreadsheet so you can record your trades, manage your P&L, and review your average cost prices and % annualized returns.
Lifetime access to a growing video library so that you don’t have to purchase another options selling course ever again
Continuously updated content so you can be confident that you’re staying ahead of the latest and greatest strategies
See you inside
As a general guide, to trade options I would suggest that you need to have at least £10,000 to start with.
With a larger account size, you can control position sizing better and build out a more diversified and robust portfolio across different industry sectors and with different betas.
For example, for UK option sellers one option contract equates to 1,000 shares. And because our strategy involves selling cash-secured puts and covered calls we are required to buy 1,000 shares if assigned after expiration.
If you want to trade US options which I often do, then one US stock option only represents 100 shares.
That can mean that there are many more opportunities to pick from the US than here in the UK, especially if you have a smaller account.
And if you don’t have that much? Don’t despair. Options Selling is not for you at this stage, but there is no reason that you cannot start to save and build up your shares of UK or US stocks.
For example, if you eventually own 100 shares of Amazon (Ticker symbol AMZN) then you can begin to sell covered calls on your position and earn extra income from owning Amazon that way.
Many people do this, slowly building up enough shares to then begin selling options on their positions to juice returns.
I discuss all this in one of my modules within the course.
Certainly! If you’ve ever purchased stocks online, you’re already halfway there.
For those who haven’t, as long as you have an interest in investing, are comfortable with numbers, and are willing to invest some time in learning a new skill, you’ll be well-prepared.
As part of the course, you can bombard me with questions privately over email if you are unsure of anything. You’re never left unsupported. Rest assured, if you have a question, chances are I’ve encountered it many times before and will gladly guide you through it.
I am only familiar with UK tax rules, if you are a student from another part of the world please consult an accountant for advice.
UK Tax questions on options are answered here: https://dividendonfire.com/options-trading/option-trading-tax-uk/
You are not allowed to buy or sell options within a stocks and shares ISA but you can do it within a SIPP.
Option premiums are subject to Capital Gains Tax (CGT) and you get a sizeable tax-free allowance for CGT followed by a charge of 10% or 20% depending on your tax band. So, the tax liability is very reasonable even outside of an ISA. And, if you combine your allowance with your spouse’s then you can make more a year tax-free.
If you want to trade options inside your pension? Well, you can run the strategy within a Self-Invested Personal Pension (SIPP) which means that all your gains are tax-free.
There are a few prerequisites; such as you’ll need to have a minimum of £35,000 to invest and you may need to pass an online quiz. Don’t worry, it’s nothing too demanding.
if you want to trade and sell options within a IRA, please read this here: https://dividendonfire.com/options-trading/ira/
This strategy is transparent and widely known among fund managers and savvy investors, especially in the US where it addresses the challenges of low interest rates. In the UK, it’s been overlooked, possibly due to the commission-driven focus of Independent Financial Advisors (IFAs) and the prevalence of spread betting promotions, which I view as akin to gambling. Additionally, options are misunderstood in the UK; however, when used as I teach in the Options Selling Roadmap, they are straightforward, less risky, and easily implemented.
In the world of investments, there’s always some level of risk, except for certain secure options like UK bank accounts (up to £85,000) and government bonds from reputable countries. Even during a banking crisis, your bank account isn’t as safe as you might assume. Risk and reward are intertwined – higher potential rewards come with higher potential risks.
Now, regarding the options wheel strategy: the risk lies in the underlying shares, not the options you sell. Emphasizing this point, the risk is associated with the shares you choose, not the options themselves. That’s why in Dividend On Fire, I advocate focusing on options trading with established, stable companies.
I often select big, reliable blue-chip companies like British American Tobacco, HSBC, British Petroleum, Segro, United Utilities, and GlaxoSmithKline. For the US market, I prefer Dividend Kings like Coca-Cola, PepsiCo, Johnson & Johnson, Colgate-Palmolive, and Target – companies with a consistent record of dividend payments and growth.
While the share prices of these companies may fluctuate, the likelihood of them going bankrupt is low. Selling options on these shares generates immediate cash flow, helping offset potential drops in share prices. By holding onto these stocks for the long term, collecting dividends, and selling covered calls, you can boost your annual return to 12-24%.
Selling options, in essence, reduces the risk compared to outright ownership of these shares. However, it’s crucial to acknowledge that some risk remains, even with blue-chip stocks. The strategy’s focus is on income from dividends and option premiums, allowing investors to withstand short-term share volatility. Our mantra is to prioritize income, making it easier to weather market fluctuations.
To summarize, owning shares or any asset involves inherent risk, but as long as the company remains solvent, prices usually recover. The key is selecting the right stocks and avoiding panic during downturns. I can assist you in building a list of sold stocks for options trading, with a focus on big, reliable blue-chip companies that pay consistent dividends, further reducing your risk.
I don’t provide copy trading services. Be cautious of others who do, as they may not disclose when to close positions or may have lower adjusted cost bases than you, making them more aggressive on strike price selection when selling puts and covered calls. I focus on education, not specific investment advice. The Options Selling Roadmap teaches you how to independently select stocks for covered calls and cash-secured puts. I aim to empower you to master your own options trading journey.
The age-old saying goes: “Give a man a fish, and you feed him for a day; teach a man to fish, and you feed him for a lifetime.”
Yes, the course covers both UK and US markets, discussing their pros and cons. Although I primarily sell options on the UK market, I occasionally engage in option selling on stocks like Tesla for its attractive premiums.
No, it’s not required. Many choose to sell covered calls exclusively, generating supplementary income by holding a portfolio of long-term stocks. Alternatively, you can use cash-secured puts to enter positions at lower prices, maximizing cash flow, and then transition to covered calls for a strategic exit. The approach is flexible, allowing you to start simple and customize it based on your preferences. Selling options as an investment strategy is very flexible. You can adapt it to your investing style in various market conditions.
Ah, this is the number one question I get asked.
I’d love to be able to give you a definitive answer, but it’s just not possible I’m afraid. It depends on several factors, including your risk tolerance, what strike prices you choose, and the shares you choose to write options on. Not to mention what the broader stock market is doing.
However, it is usually possible to achieve annualized yields on the options we sell in the region of 12-24%.
There is no guarantee that you will be able to repeatedly sell options at this level (although some Roadmappers target selling options with much higher returns) and the value of the underlying shares may well fall so that you have an unrealized loss on the whole position.
But, if you can capture some dividends as well then it gives you an idea of the level of income this strategy can- and does — achieve.
The key point is that selling options on stocks you own (or would like to own) brings in a cash premium that can help offset some of the losses if your shares take a tumble. I will show you how to record all of your trades in a campaign format so you can track these metrics with ease.
Please be aware that this is in no way a guarantee of the yields or earnings you will make. It is purely for illustrative purposes and you should realize that it is quite possible to lose money.
Been there, done that with confusing courses? Fret not! The Options Selling Roadmap includes unlimited free access for your burning questions via email. Quick responses guaranteed – because who likes to be stuck? Keep in mind, though, that I cannot give personal finance or trade-specific advice. In a nutshell, you’ve got all the support you need.
I have been asked this a few times especially since I sold one of my previous businesses for a substantial (to me anyway) sum of money.
And — if my options selling trades work so well, why not just trade it myself full-time? Why invest so much time and energy promoting and teaching it via the Options Selling Roadmap?
It’s an honest question, so below is a candid answer on why I do this vs simply just trading full-time for a living.
- Diverse Income Streams: Teaching provides an additional income source, enhancing financial stability and security.
- Efficient Time Management: Managing trades requires minimal time, allowing me to focus more on teaching and analysis.
- Continuous Learning: Teaching enhances my trading skills as I delve deep into option strategies, fostering continuous growth.
- Educational Legacy for My Son: Creating courses and resources ensures a solid financial education foundation for my son’s future.
- Purpose in Life: Teaching fulfills a sense of purpose, something I have been looking for since selling my previous two businesses.
- Doing What I Love: Choosing to teach allows me to do what I love, contributing to a more fulfilling and enjoyable life.
- Enjoyment in Collaborative Work: I genuinely enjoy working with people, and fostering a collaborative learning environment.
In essence, teaching options trading not only benefits others but also enriches my own life through learning, income diversity, and a sense of purpose.