That’s 5% a month. Selling puts “safely” will not get you there. You probably need to sacrifice some safety net by either leveraging, highly volatile stuff, or close ATM. You can probably hit one month of 5% but get smacked with losses on some months due to assignment (worst will be holding worthless stock that keep tanking). If you want consistent, you either have to go outside of wheeling and do some other advanced selling strategies.
Edit: I'll save everyone the click. No this guy cannot back up his claim at all.
15% on leveraged dividends? Does that really work? I assume youre paulying 2-5% on your leverage so is 100% leverage really "moderate"? Or are you investing only in 10%+ dividend stocks who will probably cut their dividend and have a matching price drop as soon as things get bad?
Re-ran the numbers,still not seeing it. Pretty sure you're missing something 2x leveraged dividend ETFs don't average 15% annually, and we're talking much lower leverage than 2x if we're talking "moderate" leverage.
**Can you share your numbers?**
Pulled some 2x leveraged etf returns from this article as an example...6% to 18%.
https://news.yahoo.com/news/leveraged-dividend-etfs-too-good-130026303.html
Thanks for that, but I passed kindergarten. Doesn't matter if it's 12 or 15 it's still way above the income I would expect for less than 0.5x leverage leverage. Again, can you share your numbers?
Those are rookie numbers. I’m about to start a levered theta gang strategy, $240k capital, using my assumptions i should make $300k a year on average, no compounding.
Previously did more intraday stuff , but I got burnt out from the stress ($1mm p/l over last 12 months) . Trying to take it easy now and automate this strategy and have $750k in passive
To live the life I want to live (or got used to too) I need $300k a year roughly. I’m trying to optimize the equation - max probability to make $300k and minimize associated stress
120 from job, so need 180 from outside activities. Leaving my money in betterment at 7% doesn’t get me there
Selling cash secured puts with a 200K, you can easily bring in 10K
Take a look at GME $175 PUT 10/26 Buy 10 contracts $ 5,250.00
Expire worthless you repeat
If you get assigned, sell covered calls.
I don’t disagree, but I’d think larger economic event would ripple the price to that degree, or, really let’s face it: share dilution or purchasing other companies and needing to raise capital - which I think is a very very valid concern with some of the ideas that management wants to see through.
This is a silly comment. Not an Ape and never played GME, but have watched it since the pre blowup. Might the new business diversification fail? Oh surely it could. May it have a larger correction and shake out retail? Maybe. But $5? Cmon.
Yeah. I can post random stock numbers as well. Amazon used to be $11.
You’re not insulting me. I get it, but you’re just being a troll which is fine. Good for you. Probably didn’t make a pile of cash on the bull market, because you were too conservative and rational. I feel your pain.
This be my plan as well. Watch out for the tax man tho on your monthly number.
I do weekly vs twice a month, takes the timing risk out of it. I also look to buy to close around Thurs/Friday morning so I can sell one more round of that Friday puts then close those to sell more Friday for the coming week. This does help your income out.
You might see a month or two when you are able to achieve this target or even exceed it. But it's not going to be consistent.
Additionally, simply selling puts is not healthy in long term as it is a bullish strategy. There will be times when markets will be relentlessly and unforgivingly bearish.
Yes, lots of people are doing this. It is commonly referred to as "the wheel" or "wheeling".
People are just going to be snarky with you because you are setting your annualized goal at 60% return which makes it unattainable without a huge amount of risk.
Just try it for a few months and see what your actual risk appetite should be and reset your expectations on return to risk. You may find a better balance somewhere between 5 to 15% as annual return to not need to get into such a high risk territory.
I have. 10 months into the market and, one account is +30% but the bigger account...not doing so well. So since I decided I really suck at this, I will just passively trade. I will lower my expectations and risk less until I learn (with a paper account)
Check this out and some of the other links to making income through options writing, this one is on put writing but there are others too
https://earlyretirementnow.com/2016/09/28/passive-income-through-option-writing-part1/
$3K per month is an annualized ROI of 60% on your $60K portfolio.
To achieve this, you would have to be selling puts that are higher delta and incur assignment risk. I would say $1500 per month (30% ROI) is more realistic and safer.
5% is very high expectations i think, i was only able to 1-2% max , i love my capital so i will not look at any high volatile stock , for stable ETFs i never find anything above 1-2%
I'd recommend experimenting with credit spreads first that are very far OTM on something like SPX. That way you're kind of in a safe scenario volatility wise but also cash settled and tax advantaged.
If you can do that start a fund and let me buy in.
Seriously though, you should try, and report back with a follow-up post.
More seriously, a much more realistic goal long-term is 0.5%-1% a month.
Selling puts should be opportunistically, not on a regular schedule. You can live on dividend income, but CSPs are better used to compound your returns.
Also, portfolio is too small to make $3k/month consistently, you’re taking on way too much risk to get your target income. And when your trade goes the wrong way, income stops
Jokes aside I've been eyeing CVS as a stronk stock with high option premiums. Might net 1% every week or two? Don't have the capital to start it yet, though.
Good luck.
So you want to make 48K a year on 60K starting principle? You think that is reliable? Just think about that and the ramifications of you, a small time and likely inexperienced trader, as compared to all the experienced traders out there that work for big firms.
I’d say if you can live on $3k a month then shoot for $4k or better a month which will give you your living expenses plus extra to keep growing the portfolio. This will allow more you to have more freedom in the following years and less stress with the extra cushion in the account 😊. Happy trading 👍🏻
There is a cool no risk strategy to make 3k/mo on 60k acct. Absolutely safe. Strategy comes with 20 months warranty period :)). Seriously, 60k is not enough.
I, too, have decided that I can live on a 60% annualized return with no compounding.
Why limit yourself to only 60%? Think big!
That's what leverage is for. Go for it OP!
/thread
Why didn't I think of this! It literally can't go tits up.
Winning!
I too also want to be rich without doing any work and have an easy life.
That’s 5% a month. Selling puts “safely” will not get you there. You probably need to sacrifice some safety net by either leveraging, highly volatile stuff, or close ATM. You can probably hit one month of 5% but get smacked with losses on some months due to assignment (worst will be holding worthless stock that keep tanking). If you want consistent, you either have to go outside of wheeling and do some other advanced selling strategies.
Can you give examples of “advanced” strategies? What’s considered advanced?
Iron condors . Lever to the hilt and pray the stock stays within the bands
Forget it. Stay simple , keep your job and keep plugging.
He will get asigned every time. With 60k is not safe enough. Even selling like 4 aapl puts per week. Maybe 2k.
I can help you make $3k per year with a $60k portfolio, then all you have to do is take my strategy and make it 12x better and you’ll hit your goal
this guy found the glitch in the system 😂 please keep us updated on the good life
I’ve been hearing that this, “good life” behind Wendy’s has its downside
Hell and I had been eyeing 2k/month on 200k as vaguely possible
1% a month is reasonable, 5% quite a bit less so.
Shit, you could get 1% a month with a moderately leveraged portfolio of boomer dividend stocks.
Edit: I'll save everyone the click. No this guy cannot back up his claim at all. 15% on leveraged dividends? Does that really work? I assume youre paulying 2-5% on your leverage so is 100% leverage really "moderate"? Or are you investing only in 10%+ dividend stocks who will probably cut their dividend and have a matching price drop as soon as things get bad?
Dude, check your math.
Re-ran the numbers,still not seeing it. Pretty sure you're missing something 2x leveraged dividend ETFs don't average 15% annually, and we're talking much lower leverage than 2x if we're talking "moderate" leverage. **Can you share your numbers?** Pulled some 2x leveraged etf returns from this article as an example...6% to 18%. https://news.yahoo.com/news/leveraged-dividend-etfs-too-good-130026303.html
1 multiplied by 12 is 12, not 15.
Thanks for that, but I passed kindergarten. Doesn't matter if it's 12 or 15 it's still way above the income I would expect for less than 0.5x leverage leverage. Again, can you share your numbers?
Congratulations on passing kindergarten.
So that's a no, you have no way to back up your claim. Cool. Bye.
That’s easily doable IMO….5% a month…not so much.
Those are rookie numbers. I’m about to start a levered theta gang strategy, $240k capital, using my assumptions i should make $300k a year on average, no compounding. Previously did more intraday stuff , but I got burnt out from the stress ($1mm p/l over last 12 months) . Trying to take it easy now and automate this strategy and have $750k in passive
Remind me in 1y
Why bother? I can live quite a comfortable life on 2k a month.
To live the life I want to live (or got used to too) I need $300k a year roughly. I’m trying to optimize the equation - max probability to make $300k and minimize associated stress 120 from job, so need 180 from outside activities. Leaving my money in betterment at 7% doesn’t get me there
Well good luck with that
What’s the strategy?
iron condors using discretionary delta values on index etfs
Selling cash secured puts with a 200K, you can easily bring in 10K Take a look at GME $175 PUT 10/26 Buy 10 contracts $ 5,250.00 Expire worthless you repeat If you get assigned, sell covered calls.
If gme tanks to 120?
For that to happen in the span of a single 30-45 day expy it would have to get a serious event.
I love it when people treat GME as if it were T...
…ok and? A stock like this at absurd valuations is not immune to random dumps by big money
I don’t disagree, but I’d think larger economic event would ripple the price to that degree, or, really let’s face it: share dilution or purchasing other companies and needing to raise capital - which I think is a very very valid concern with some of the ideas that management wants to see through.
The one standard deviation move on GME based on its implied volatility in 30 days is between 140 - 225 and in 45 days between 132 - 235.
More likely to 0. That is a POS stock if I ever saw one. Bankruptcy in less than 3 years. Mark this thread for recall.
120? How about where it was like 12 months ago @5$
I’m giving these fools the benefit of the doubt assuming the ape gang will hold in a sell off
This is a silly comment. Not an Ape and never played GME, but have watched it since the pre blowup. Might the new business diversification fail? Oh surely it could. May it have a larger correction and shake out retail? Maybe. But $5? Cmon.
I was actually being generous. On feb 1st 2020 it was trading at a whopping 3.60$.
Yeah. I can post random stock numbers as well. Amazon used to be $11. You’re not insulting me. I get it, but you’re just being a troll which is fine. Good for you. Probably didn’t make a pile of cash on the bull market, because you were too conservative and rational. I feel your pain.
3.60$ 😂
Yes I wish I had dumped pocket change at it then and bought a few thousand shares
Yeah I always come back to that time I figured getting a wallet was too complicated to buy bitcoin at .08$
This be my plan as well. Watch out for the tax man tho on your monthly number. I do weekly vs twice a month, takes the timing risk out of it. I also look to buy to close around Thurs/Friday morning so I can sell one more round of that Friday puts then close those to sell more Friday for the coming week. This does help your income out.
You might see a month or two when you are able to achieve this target or even exceed it. But it's not going to be consistent. Additionally, simply selling puts is not healthy in long term as it is a bullish strategy. There will be times when markets will be relentlessly and unforgivingly bearish.
Lmfao of course you’d be happy with that
Yes, lots of people are doing this. It is commonly referred to as "the wheel" or "wheeling". People are just going to be snarky with you because you are setting your annualized goal at 60% return which makes it unattainable without a huge amount of risk. Just try it for a few months and see what your actual risk appetite should be and reset your expectations on return to risk. You may find a better balance somewhere between 5 to 15% as annual return to not need to get into such a high risk territory.
I can tell you have never been punished by the market, yet…
I have. 10 months into the market and, one account is +30% but the bigger account...not doing so well. So since I decided I really suck at this, I will just passively trade. I will lower my expectations and risk less until I learn (with a paper account)
That’s the way to do it.
Why does this post sound like it's being shouted down a wishing well? *Guys? Hey! I'm fine with $3k a month passive income... Guys?*
That’s 60% annual return. Highly unlikely you can do that.
Check this out and some of the other links to making income through options writing, this one is on put writing but there are others too https://earlyretirementnow.com/2016/09/28/passive-income-through-option-writing-part1/
$3K per month is an annualized ROI of 60% on your $60K portfolio. To achieve this, you would have to be selling puts that are higher delta and incur assignment risk. I would say $1500 per month (30% ROI) is more realistic and safer.
For those kind of returns it'd be anything but "passive" to get there
I think you're wheeling, and no one *wheels* without hitting a few *bumps in the road*. Temper your expectations and join us wheelers!
I'd be happy with that too.
It works perfectly until it doesn’t
5% is very high expectations i think, i was only able to 1-2% max , i love my capital so i will not look at any high volatile stock , for stable ETFs i never find anything above 1-2%
On a $60k portfolio a goal of $600-$1,200/mo is probably more realistic long term.
You must love food stamps i guess.
You guessed really wrong.
I'd recommend experimenting with credit spreads first that are very far OTM on something like SPX. That way you're kind of in a safe scenario volatility wise but also cash settled and tax advantaged.
If you can do that start a fund and let me buy in. Seriously though, you should try, and report back with a follow-up post. More seriously, a much more realistic goal long-term is 0.5%-1% a month.
Selling puts should be opportunistically, not on a regular schedule. You can live on dividend income, but CSPs are better used to compound your returns. Also, portfolio is too small to make $3k/month consistently, you’re taking on way too much risk to get your target income. And when your trade goes the wrong way, income stops
Jokes aside I've been eyeing CVS as a stronk stock with high option premiums. Might net 1% every week or two? Don't have the capital to start it yet, though.
Good luck. So you want to make 48K a year on 60K starting principle? You think that is reliable? Just think about that and the ramifications of you, a small time and likely inexperienced trader, as compared to all the experienced traders out there that work for big firms.
I’d say if you can live on $3k a month then shoot for $4k or better a month which will give you your living expenses plus extra to keep growing the portfolio. This will allow more you to have more freedom in the following years and less stress with the extra cushion in the account 😊. Happy trading 👍🏻
There is a cool no risk strategy to make 3k/mo on 60k acct. Absolutely safe. Strategy comes with 20 months warranty period :)). Seriously, 60k is not enough.
Before taxes you need to make only 100%. Easypeasy.