How to Make $1,000 Selling Options by Christmas

Summary

In this video, the creator shares strategies for making $1,000 by selling options in the cryptocurrency market, with a focus on Bitcoin-related ETFs and stocks like Bitx and Mstx. The key idea is to leverage high implied volatility (IV) and the likelihood of a flat or sideways market in the coming weeks to sell options for premium gains. With guidance on managing losing trades through rolling options and maintaining safety with strategic levels, the creator explains how to capitalize on current market conditions while minimizing risks and maximizing returns.

Takeaways

• 😀 The current market conditions for Bitcoin and crypto assets suggest sideways movement rather than a sharp drop, making it an ideal time for options selling.
• 😀 Implied volatility (IV) is high right now, meaning options premiums are elevated, providing an opportunity to make significant income from selling options.
• 😀 Selling options can be a safer strategy than buying, as you can earn premiums and roll out of losing positions if necessary.
• 😀 The focus of the strategy is on selling options for stocks like BitX and MSTX, which are associated with the crypto market and have high IV.
• 😀 To minimize risk, it's crucial to select key levels where the underlying asset is unlikely to drop below, such as the 52 and 30 levels for BitX.
• 😀 The speaker suggests targeting a 5% to 8% return by the end of the year using a consistent options selling strategy based on high IV and sideways market conditions.
• 😀 A key risk management technique is rolling options, which involves extending the expiration date of a losing trade and collecting additional premiums to avoid a loss.
• 😀 When selling options, it's important to set the strike price below key support levels to maximize the chances of profit and minimize potential loss.
• 😀 The speaker provides specific strategies for managing trades, including rolling out and down if the position moves against you, allowing you to stay in the trade without taking an immediate loss.
• 😀 This approach works well for individuals with a moderate to high risk tolerance who are comfortable with managing options and rolling positions until favorable market conditions emerge.

Q & A

What is the main strategy being discussed in the video?

The main strategy discussed is selling options, particularly focusing on crypto-related stocks and ETFs that are expected to stay flat or move sideways over the next two months, taking advantage of high implied volatility (IV) to generate premium income.

Why is the presenter focusing on option selling rather than buying options?

Option selling is preferred because it allows the seller to take advantage of time decay and high implied volatility (IV). The risk is lower than buying options, as sellers can roll their positions and adjust if the market moves against them, ensuring higher chances of profit with lower risk.

What is implied volatility (IV), and why is it important for option selling?

Implied volatility (IV) measures the expected volatility of the underlying asset, which directly affects the price of options. A higher IV means higher premiums for options, which is advantageous for option sellers, as they can collect more premium while managing risk.

What is the reason behind the prediction of a flat or sideways movement in the crypto market?

The prediction is based on the current market cycle, where Bitcoin and other crypto assets are at high levels, and market makers are likely to keep prices flat for a period. This flat movement offers an opportunity for option sellers to profit from time decay.

How does the performance of institutional investors impact the strategy?

Institutional investors, like BlackRock and Fidelity, are accumulating Bitcoin, which signals continued market support. This institutional buying adds stability and reduces the likelihood of a major sell-off, making it more likely that the market will remain flat or move sideways, creating ideal conditions for option selling.

What are the two crypto-related tickers the presenter discusses for option selling?

The presenter discusses two crypto-related tickers: BITX and MSTX. BITX is linked to Bitcoin, while MSTX offers higher premiums due to greater implied volatility.

Why is MSTX considered a better option compared to BITX?

MSTX offers higher implied volatility (IV), which translates to larger premiums. This makes it a more attractive option for selling, as the seller can receive a higher payout for the same level of risk.

What is the recommended strategy if an option position begins to lose money?

The recommended strategy is to 'roll' the option. This means extending the expiration date and possibly adjusting the strike price to maintain a favorable risk/reward profile. This allows the seller to manage a losing position by giving it more time to recover.

What are the risks associated with this strategy, and how can they be mitigated?

The main risk is a sudden market reversal or sell-off, which could lead to significant losses. However, this risk can be mitigated by carefully selecting strike prices, managing positions through rolling, and focusing on high IV options, which offer better risk management through premiums.

What is the significance of the 5% to 8% return mentioned in the video?

The 5% to 8% return is the target profit from selling options on MSTX, BITX, and other assets over the next two weeks. These returns are achievable due to high implied volatility and the expectation of a flat or sideways market movement, which benefits option sellers.