Photo by Muzammil Soorma

Market Dynamics Have Changed

The World Wide Web and the rise of computerized trading platforms have created a far deeper and more liquid options market than ever before. Retail investors can now access products that used to be the prerogative of large institutions. The frontier between the big market players on the one hand and retail investors on the other hand has become more narrow.

In addition, increased competition among online brokers over the past few years has benefited retail clients with reduced fees and commissions but also access to better research, educational, and trading tools for a fraction of what they used to cost barely a decade ago.

Income Generation

Options, just like stock dividends, can be a source of income generation except that you control the timing and size of the cashflow. With options you are not dependent upon the decision of a board of directors that decides when and how much you will receive as a shareholder. For instance, you can choose to sell covered calls on stocks (or ETFs) as a source of income generation. Every time you sell a call you receive a premium upfront. If you wait patiently until the option expires (whether in the money, or out of the money), the premium is a cash inlay that is for you to keep no matter what happens to the stock.

Selling cash-secured puts on stocks (or ETFs) that you favor can also be used to drive income generation. Again, when the option expires, you keep the income generated through the sale of the put regardless of where the stock ends up going: up, down, or sideways.

There are many other options strategies that allow for income generation and cash input at inception (often referred to as a ‘net credit’).

Ideal for Hedging

Risk management and asset protection are other key benefits of using options. We describe the techniques above and all these advantages in greater detail in our free online courses.
Of course, options can be risky too as you could lose your entire investment or be exposed to large losses. However, if you follow our free education program and learn all the intricacies of risk management principles the likelihood of this happening will be greatly reduced and you will be on your way to becoming a well-informed and successful trader. By the way, it is worth noting that options were originally created to hedge, not to speculate.

Your Success Depends on Your Motivation

Anyone can be successful with options but there is a catch…you must really want it! You must be willing to learn and have the patience necessary to understand and eventually master all that options have to offer. We would be lying if we told you it could happen overnight. Mastering options requires commitment, consistency, and effort on your part but the reward can be multifold. Income generation is a source of freedom.

Ultimately a long journey is nothing else than a succession of small steps that have been taken one after another and we are here to help you along the way – from start to finish. Not only by teaching you what options are and how to trade them successfully and safely, but also by sharing our most proven strategies that you can then replicate and adapt to your own style and risk appetite. Your only limit is taking that first step, not your current knowledge of options, nor your time available to trade, nor even your account size. None of these hurdles are actual limits to your becoming a successful options trader. And please don’t feel intimidated by options, as there is nothing mysterious about them. It’s all about common sense, good education, and perseverance.
Income generation is only a stone’s throw away.