US Option Premiums another source of income (I hope)
At the end of 2017, I decided to foray into US Options. I believe I needed to learn more to find another form of income.
Before I got my hands dirty, I started to read more books about Value Investing and Options. I got myself into a mentorship program as well. Next, I decided to open another trading platform - TD Ameritrade.
I am starting small since I am still considered a noob. I will simply just be selling call or put options:
- Selling a Call Option - I have an obligation to deliver the stock at a predetermined price to the option buyer.
- Selling a Put Option - I have an obligation to buy the stock at a predetermined price if the buyer of the put option wants to sell it to me.
Both the above options would allow me to receive an option premium (an income received by me by selling an option contract to another party).
I am not advocating Options here. There are risks involved. Please do your homework.
In general, by selling a put option, I am interested to buy the underlying stock. I am comfortable owning the stock at the predetermined price and I believe the predetermined price is an attractive price. Vice versa, I sell a call option for the opposite reason. I would like to sell off my current stock when I believe it is overvalued.
First option trade
I decided to print screen my first trade on 6 December 2017 as a memento.
I will be monitoring my progress and updating my results.
Since December 2017 to date, I have received ~US$750 of option premiums.
Wish me the best of luck!