I will be showing this with a stock called MARA but you can do this with any stock, the more volatile the stock the greater the reward but the greater the risk. MARA is tied into directly to Bitcoin so if you think it is a good investment this is the stock. if you don't like Bitcoin don't do it with this stock. It is best to do it with stocks between $5 and $10 dollars for people with moderate budgets
BUY 500-1000 SHARES ON MARA ..I bought 1000 For the sake on integrity , I already own the thousand @$6.36
today buy 1000 share of MARA @$5.75 =$5750
THEN SELL THE JAN 152021 options with a $9 strike price for about $.90 =$90/option, effectively a covered call but at a better price.
no matter what happens by Jan 15 you get to keep the $90. If MARA is trading under $9 the option expires worthless, if it's above $9, you relinquish your shares making a $4.15 profit $3.25 +$.90 =$4.15 per share. NOTE if the stock shoots up to $15, you still only get $9.00
You ALSO sell the JAN152021 PUTS with a $4 strike price for $.60 this means if the stock goes below $4 on Jan 15th you must buy the shares back @$4 no matter what the price. I don't see that happening but it is a volatile stock. Again since you get a $.60 premium the stock downside breakeven would be $3.40.You will also see you stock buying power be reduced by $4000 to cover your down side
SUMMARY You should be getting around $1.50 for buying and selling the calls and puts. If you want to sell and buy different amounts that is fine, but just remember never sell more than you own on the calls.
in effect you have bought a stock selling for $5.75 and reduced the basis by $1.50 even if the stock price doesn't change. A 26% profit in 5 to 6 weeks. you now have a range of $4-$9. If the stock stays in that range , you keep both the stock and the money and you can do it all over again. I will give you the new strike prices if that happens and basically by the 4th time if all goes well your stock will basically be paid off..ANY QUESTIONS JUST ASK ..I wrote all this so even the novice can follow, but the experienced trader knows this is sooooo easy and it will take less than 2 minutes to make those trades.
BUY 500-1000 SHARES ON MARA ..I bought 1000 For the sake on integrity , I already own the thousand @$6.36
today buy 1000 share of MARA @$5.75 =$5750
THEN SELL THE JAN 152021 options with a $9 strike price for about $.90 =$90/option, effectively a covered call but at a better price.
no matter what happens by Jan 15 you get to keep the $90. If MARA is trading under $9 the option expires worthless, if it's above $9, you relinquish your shares making a $4.15 profit $3.25 +$.90 =$4.15 per share. NOTE if the stock shoots up to $15, you still only get $9.00
You ALSO sell the JAN152021 PUTS with a $4 strike price for $.60 this means if the stock goes below $4 on Jan 15th you must buy the shares back @$4 no matter what the price. I don't see that happening but it is a volatile stock. Again since you get a $.60 premium the stock downside breakeven would be $3.40.You will also see you stock buying power be reduced by $4000 to cover your down side
SUMMARY You should be getting around $1.50 for buying and selling the calls and puts. If you want to sell and buy different amounts that is fine, but just remember never sell more than you own on the calls.
in effect you have bought a stock selling for $5.75 and reduced the basis by $1.50 even if the stock price doesn't change. A 26% profit in 5 to 6 weeks. you now have a range of $4-$9. If the stock stays in that range , you keep both the stock and the money and you can do it all over again. I will give you the new strike prices if that happens and basically by the 4th time if all goes well your stock will basically be paid off..ANY QUESTIONS JUST ASK ..I wrote all this so even the novice can follow, but the experienced trader knows this is sooooo easy and it will take less than 2 minutes to make those trades.
