Forget Forex! He Made $50k Trading This Way...
what's up traders welcome to this video with zoheb who you might recognize from the channel he he was on here a long time ago talking about forex a one glance trader is what he goes by on youtube welcome to the show zoeb thank you cam how are you you good yeah i'm good mate well look guys we've got something very different for you today so zoe have sort of veered away in the past year from forex and he now trades options and he wants to show you what he's been doing to i think it was make over 50 grand about 50 grand we're going to see proof of that in a second in the past year just trading an option strategy that you're going to learn today in the video so zoheb i'm going to hand everything over to you share your screen let's get on with it hey folks my sponsors city traders imperium have just launched some amazing changes to the funded trader program you've got to check out you can now skip the whole evaluation trade gold as well as forex plus they've increased the drawdown you're allowed in both the evaluation and when funded with c2a it's even faster and easier to reach up to four million dollars in funding with a 50 to 70 profit share click the link in the description to find out what else has changed brilliant i appreciate it and yeah so i just wanted to just give you guys a quick snapshot of my interactive brokers account and like cam mentioned inside the intro you know i came across options trading i dabbled in it uh last year um but in january 2021 i started to become serious and i invested you know just um just over 15k into the into the account and i sold my first apple put option where i received a options premium credit which we'll go into of like 46 and after that i've been hooked and i've been trading a strategy called the wheel option strategy which we'll talk about today but effectively you know as you can see here that you know started back in january and you know since you know september the sixth seventh you know i'm around 66 67k uh us dollars and um there has been a couple of deposits on the way like this big spike here is a is like a 510k deposit but like i said 99 of this of this is all collected through either options premium doing the wheel strategy or capital appreciation uh in stocks and um what i wanted to do is walk you guys through the wheels options uh strategy so what i've done is i've kind of put together a little guide and you know we can we can link to this cam if anyone wants to wants to go kind of pick this up and there'll be a lot more videos on my channel if you guys are interested but effectively what we're doing here is you can either well firstly options are you know a leveraged product for for stocks and you can either buy options or you can sell options and what strategy i'm teaching you now is where you sell options so when you sell options you receive what's called premium or a credit um that the buyer pays and what i've been doing is i've been selling options on stocks that i've been bullish on and we'll go through an example in a second uh to to generate monthly income through collecting those uh those option premiums and there's kind of three steps to this strategy and i like to start with step zero because a lot of people when they look at the wheel strategy and selling options what they do is is that they pick stocks that have very high premiums therefore they collect a lot of credit um you can get burnt by that because if you are assigned the shares you have to hold the shares so my number one tip is if you're looking to sell options or trade the wheel strategy is to pick a stock you don't mind owning so this is a bullish strategy where you expect the stock to go up and one of the best stocks throughout 2021 that i've made a lot of money on is riot blockchain now riot blockchain is a us bitcoin mining company and if you overlay um a btc chart against riot you will see that it moves very similar to bitcoin because as as riot as the name suggests they mine bitcoin so as they mine mine and mine more bitcoin and bitcoin rises riot stock rises as bitcoin falls riot also falls as well but i'm very long-term bullish bitcoin so therefore i'm long-term bullish riot and therefore riot is the stock of choice of why i um sell options and as i mentioned before it is a very volatile stock and the more volatile a stock is the more premiums or more expensive options premiums are so you can make a better return on the collateral that you're putting down so once you pick a stock and again like i said most stocks have options with them you might have some small cap stocks that don't have options available currently but most stocks will have options available so step one is to select a put option below the current price now if that makes no sense we're going to go through that but what i wanted to do is just show you a daily chart of riot so as you can imagine riot went up to highs of just moving its head out the way cam went to heiser about 80 and that's when you know bitcoin would that is pete and then as we all know throughout february march and april um crypto had a massive sell-off and now you can see here that uh bitcoin you're not bitcoin so right is in what's called an ascending triangle which is a bullish kind of pattern where where um where price is making lower highs and then we've got this resistance at around the 39 mark so the best thing about options of step one is that we have to sell an option or select a strike price below the current price so the market is currently closed and it closed that 30 and 39 cents so bitcoin has had a big drop over the last couple of days because el salvador went uh live were the first country to accept bitcoin as actual tenure they've had a bit of a snag with that which has had a drop in bitcoin in my view this is an over over over estimation or over reaction and i think bitcoin will will recover so now is a good time to look to start selling put options and what i've drawn here i've drawn a line at 27 the reason why i've drawn the line at 27 is because we've got two areas here of support that um that riot has found hey want to trade crypto and gold like the institutions well you can and it's free for 14 days with sage strategies fully automated trading strategies check out the live track records for 25 unique strategies plus they host everything for you which is perfect for beginners to advance traders or investors simply sign up for the 14 day free trial today to experience it for yourself the question i always ask myself when i sell a put option is am i willing to own riot stock at 27 and i'm 100 happy to own stock in in right in in riot at 27 so once you establish your strike price and if we go back to here um i'll go through the definition of what selling a put option means it means that i'm willing to buy 100 shares of the underlying stock in this case riot at a strike price of my choosing so we've decided to go in this hypothetical situation 27 um by an expiration date so in this case we're going to do the end of next week which is the 17th of september in exchange for 58 so 58 premium so what does all of that mean so when you sell options you basically sell contracts and contracts are blocks of 100 shares so you can't sell options for 10 shares you have to do a minimum of one contract which is 100 shares so i'm saying i'm willing to buy 100 shares of riot at 27 because again if you look at the stock if the stock again still needs to drop a little bit to get to that strike price um by 17th of september and if anyone takes this trade i will receive 58 cents per share and because it's 100 shares that means i'll get 58 transferred into my brokerage account on at the exact moment this order gets filled so i've just made 58 straight away not waiting a few days for checks to get cleared i get instantly banked into my account which i can withdraw and go do whatever i want with it but you know there is risk to this trade so the risk is at the moment that riot may drop to 26 by by september the uh 17th and what that means is i will then have to buy or force to buy 100 shares at 27 so my brokerage account will lock away two thousand seven hundred dollars for the duration of this trade just in case riot drops before twenty seven dollars now what i just wanted to quickly show you was an example of an options chain so this is where i got the the premium figure for and this is barchart.com you can use yahoo finance or just google riot option chain and you'll get uh lots of vendors that will show you the options chain so we've got our strike price and and then the current price so if we go down to the 27 strike so riot has to drop a further 11 for me to be assigned those shares that's crazy 11 is a big swing um and and this is the bid price of the of the option price so that's where i got the uh uh 58 58 for and that is a 2.2 return so i just made 2.2 return on my money in just in a week and a half now that's insane tell me where you can make 2.2 guaranteed um in a in in like five six days and the worst case scenario is is that i buy 100 shares of riot at 27 now that to me has been insane and i've been wrapping my head around this concept now for ages and i feel like i'm just printing money because i would love to own riot stock at 27 even if riot dropped to 20 i'm i'm no i've got no issue holding right at 27 and going back to step zero only do this on on stocks that you love and you're willing to hold in case you know right does drop the 15 for example so so that's step one and as i said there are two outcomes by september the 17th the first one is riot stays above 27 um by september the 17th the option expires worthless and you keep the 58 so if that happens let's say riot goes down from 30 to 29 by september 19th so the stock's gone down and i still keep the uh 58 dollars and the option expires worthless if that happens i just repeat the process the week after i'll do another right put another right put another right put and i'll keep doing that until i eventually get assigned the shares my aim is not to be assigned the shares so i'm trying to you know use my technical analysis use my fundamentals my catalyst looking at the news to try to stay away from it but close enough to get higher premium so if riot does drop by september 17th i will be assigned 100 shares of riot costing me 2 700 but i keep the 58 premium so whatever happens that 58 no one can take that away from me and if that happens i move on to uh step two and step two is so now i own 100 shares of riot at 27 what i do now is the terminology sell a covered call option at your cost basis aka your assigned price so what that basically means is i'm willing to sell 100 shares of riot at a strike of 27 so that's my cost basis that's their my sign price by 0 9 24 so that's one week after and and options most weekly options expire on a friday and i've kind of worked out the premium i don't know the premium because i don't know what right it's going to close up but based on the current price and everything it's roughly about 90 cents per share which works out to be 90 premium so i'm holding a stock that is potentially below 27 so i'm holding a losing stock but i'm still making income and that's the point i want to get across is i'm holding stock that i'm waiting to go up but i'm still banking weekly premium so that income is still coming into my account every single week and again there's two outcomes here that that can happen riot can stay below 27 before the expiration the option expires worthless i keep the 90 and i repeat it i'll sell another covered call at 27 now you can go above your cost basis to 28 so you can collect some appreciation when wright gets to 28 or above but if i like to just do it at my cost basis most of the time to get in and out of the stock to free up my collateral to keep doing this process and then the last outcome is right could rise above 27 therefore i sell my 100 shares i get 2 700 back into my account and i get to keep the 90 premium absolutely insane if you just look at the roi on this so the roi is your your all your net credits you received so i got 58 for selling the put and i got 90 for selling the covered call divided by the capital i put in that's 5.4 percent and you know i've been making five to ten to fifteen percent some trades and quite comfortably i can make one percent a week easily by doing it but um by kind of doing this strategy but you know i'm averaging around 10 20 a week because what i'm doing is because i've got a fairly large account i'm not selling one option i'm selling one contract i'm sending like 10 contracts so instead of 2 700 as my collateral i'm doing 27 000 or sometimes you know for uh you know 50k and that's how i can get to making you know three four grand a week by doing the strategy and and you know if you guys want to see me do this uh strategy live uh on my youtube account uh one glance trader um you know i've got an options playlist which i can we can link to below as well that shows me you know placing these trades i've got a dedicated wheel strategy video which goes into this in a lot more detail as well as you know me placing trades on my live account you know like i made 868 in five minutes um and i'm currently doing a uh riot uh i'm actually doing the wheel strategy on riot using one contract to show on my youtube channel to educate people on the wheel strategy of those who are just starting out on on smaller accounts as well so you know don't know if you've got any questions can but yeah that's pretty much the strategy hey guys everyone what broker i use well i use these guys hanko trade look it was a no-brainer for me because i was looking for a broker with really good trading conditions and one without any leverage restrictions look also by joining hanko trade i was able to cut my cost of trading significantly with this super low commission of one dollar per 100k look if you want to find out more check out hankotrade.com
or there is a link in the description awesome i mean one question i did have was like what is there sort of a tax benefit of taking the premium as your profit and leaving the stock in there um so yeah so because i've been doing this less than a year currently at the moment so i'm still happy to have to go through that process at some point next year but effectively from a uk standpoint it's classified as capital gains tax so it's not income tax which is which is good uh because it's very beneficial from a tax rate purposes especially from a uk perspective so i'm sure my my accountant will tell me some uh some some some some ways around some of the stuff but um but yeah the the good thing is is that your tax data capital gains for any option premiums that you get as opposed to other forms of tax which are hit you at a higher rate so so the other question i've got is so that essentially you know what your return is as soon as you place the trade yeah exactly so the the piece that is is what i love about this you've got the control right you know how many shares you want to buy you select the strike and you select the expiration and you select the premium yes the market will determine what that premium is but if you want to wait and ask for 60 or 65 dollars you can leave that limit order inside the market uh in the hope for it to get filled so and and yeah so you know exactly what you're doing and this and one of the main questions i normally get is in this we take this example let's just say riot drops to 15 right so now i'm holding a losing stock that's you know 20 30 down and i'm i've got 100 shares um what my what what can i do so there are things you can do like you can avoid assignment by rolling an option which is effectively you can buy your option back and immediately open a new option at a longer expiration to avoid assignment um you can sell covered calls below your cost basis so if riot was at 17 i could sell covered calls at 20. there is a risk of that because right could spike above 20 and writes a very volatile stock i wouldn't recommend it for beginners but you know more advanced traders and if you've got the technical analysis if you don't think right it's getting to 20 over the next couple of weeks or whatever it is then you can do that to earn more premium while you're holding the stock and while you wait for it to recover or what you could do which is what i like to do is i like to have cash in reserves so if right did go down to 15 i would then sell another put on riot at 15 14 and that will lower my cost basis so we'll bring my average down so i'll own 200 shares instead of 27 i'll own 200 shares at 21 or something along those lines so you keep buying more puts and you keep buying more shares at a lower price than your cost average down then as the share price has got less to recover to go make that and you make more more premium because now you own more shares um so if you own 200 shares in the 58 example you'll make whatever that is 118 right uh yeah 118 dollars premium as a um as opposed to only earning 58 um as part of that process cool um and last question would you would you ever now consider buying a stock without doing this taking this approach no i've got a video coming out shortly it is that's titled uh never ever but by a stock uh outright uh which is basically you know just uh just just go and get um just go and buy a put option and one of the hard things is about this particular strategy is is that you do need a fairly sized account do it you can do it on margin that's something i'm looking now to graduate to the next level in terms of kind of doubling my buying power to sell more options using margin and lev and even more leverage because options is quite a leverage um a kind of uh kind of strategy but yeah that's effectively what what i've been doing now for you know the last you know nine months or so and long may continue well look um zoe here can you tell the guys what's the best way for them to get hold of you uh the best way is through my youtube channel one glance trader or you know youtube.com four slash one glance trader and like i said my email is oneglancetrader gmail.com so feel free to reach out i've got lots of options trading videos as well um you know i still dabble in forex every now and again so there's lots of stuff on there but when i was on the show last time um but yes the best way to get me awesome well look that is a fantastic i i've learned a ton i did actually start off with options when i first looked at trading so this has been a great refresher uh guys do remember hit subscribe hit like and click on that notification bell click all and we'll see you in the next video you
2021-10-06 18:54
