It's Pay Day

The third Friday of the month is my favorite because it is option-expiration day.

I trade for income by selling options. The best part is cash can be collected in any kind of market.
Stocks rise, move sideways or even fall a little and we still come out ahead.

When a trade expires worthless we move on to other opportunities. If we are assigned shares, as long as the stock is above our stop loss, we have the chance to earn more income.

Strategy Review

By selling puts, other market participants pay us up front for agreeing to buy shares of a stock at a lower price.

By selling covered calls, we use the shares we own to get paid for agreeing to sell those shares at a higher price.

This agreed upon price is called the strike price.

Friday Trade Updates

Starbucks (SBUX) $57.50 puts opened on 4/17/2018 current return 0.9%
Home Depot (HD) $180 puts opened on 5/2/2018 current return 1.8%
Hershey (HSY) $92 puts opened on 5/23/2018 current return 2.3%
Schlumberger (SLB) $69 puts opened on 5/31/2018 current return 1.4%

Home Depot will expire worthless. Your broker will automatically clear the trade from your account over the weekend. And you keep the cash. This 1.8% gain in six weeks works out to 14.9% annualized.

Starbucks and Schlumberger are down since recommendation. The cash up front on both trades, has still provided a positive return of 0.9% and 1.4%, respectively.

Hershey has climbed since our recommendation on track to close for the maximum gain.

All the trades are in great shape. If assigned, we will look for the right time to sell covered calls and keep the cash flowing.

Why are you not trading for income yet?

Disclosure: I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.