When I first heard about options trading, I immediately thought about risky plays in the stock market where you can make a lot of money really fast, but you can also lose it all really fast. After educating myself about options trading, I wanted to see for myself and see if it's an option for me, see what I did there. So I started with purchasing call options, which I'm not going to cover in this video, but to give you a short explanation, if you purchase a call option, you buy the right. Not the obligation to purchase a specific stock at a specific price within a specified time. So you're basically hoping for the stock to appreciate in value so you can either sell the option for more money or exercise the right and purchase the shares at the strike price. Alright, so I started purchasing call options and I had some good trades, I had some bad trades, and I quickly realized I don't know what I'm doing here. So instead of betting and hoping for a stock to appreciate in value, I had to change my strategy. So I started selling options. This already sounds way better because every time you sell something, that means you usually get paid. And that's exactly what I did. What is selling it put me when you sell a put you were agreeing to purchase a specific stock at a specific price at a specific time. Let me give you an example. I have $1,000 in my brokerage account and I like the stock ABC, which currently trades at $10. I now sell a put option at $9 with the expiration date of next week Friday. Since one contract always handles 100 shares of the underlying stock, this means I need $900 as a collateral in case ABC's price drops to $9 on expiration date. For this contract, I receive a premium of $0.50 per share, which brings my premium to $0.50, which I immediately receive in my account. Now I have to wait till Friday and see what happens. Now we have two outcomes. Number one, ABC trades above $9 and I don't have to purchase any shares. My collateral gets released back into my account and I now have $1,050 in my account. Outcome number two, ABC trades at $9 and I get assigned 100 shares of ABC. My account now holds $150 in cash and 100 shares of ABC which are currently worth $900. So this was week one and depending on the outcome, I can either sell another put or if I got assigned 100 shares, I can do the following. Now that I own 100 shares of ABC, I can sell a call which means I am willing to sell my 100 shares at a specified price at a specified time. So I could technically sell an $11 call option with the expiration date on Friday. For this contract, let's say I get a premium of $0.04 per share which brings the premium up to $0.40, which immediately gets credit at to my account. I now have $190 in cash in my account and my 100 shares of ABC are up for sale at $11. We have two outcomes again. Number one, ABC trades below $11 and I don't have to sell my 100 shares and I keep the premium of $0.40. Pretty simple. Outcome number two, ABC trades above $11 on expiration date and I have to sell my 100 shares at $11. I now get $1,100 credit at to my account plus I keep the premium of $40. My total account is now worth $1,290 all in cash. All right, this is beautiful. But now let's see real trades and I can show you exactly how I got paid $1200 and $1500 in just two weeks. So as you can see here, I sold a put on the stock riot with a strike price of $54 with an expiration date of $3.19. I was able to purchase seven contracts which paid a premium of $1,190 which got credit at to my account immediately. Let's fast forward to March 19th and see what happened. Riot traded at $60.65 which means I didn't have to purchase any shares and my collateral got released. Next week I did the exact same trade but with a different expiration date. I sold a put with the strike price of $54 with the expiration date of March 26th. For this contract, I got paid a premium of $1,519. Let's see what happened on March 26th. On expiration date, Riot traded at $48.22 which means I got assigned and I had to purchase 700 shares at the strike price of $54. So what can I do now? Now that I own 700 shares of Riot, I can either just hold on to them and don't do anything or sell a call option receiving another premium and say I'm willing to sell them at a specific price. I obviously look at different scenarios and here's what I think I'll be doing. If Riot trades above $54, I might sell all of my 700 shares immediately and also sell another put option with a very low strike price, probably around $48. My premium might be a little bit lower. I don't know why but I feel like there might be a little correction in Bitcoin which also brings down the price of Riot so that's why I don't want to risk too much of it and don't hold on to my 700 shares at $54. If Riot trades below $54, I'm obviously going to hold on to my shares and I'm just going to sell another option at either exactly $54 or $55 so I get a little bit of stock appreciation as well. But yeah, that's it for today's video guys. If you enjoyed this video, I would highly appreciate it if you just leave one like, that's all I'm asking. Just like one click that would help me out a lot. Thank you so much for watching. I'll see you next time.