Oct 30 - How I use Option Trading
Oct 30 - How I use Option Trading
- Option Trading (2020-2025)
- Today (Oct 30) Trades
- Option Trading Income used for more STOCKS
- Dividend Stocks (2025)
Option Trading (2020-2025)
I have been trading options before COVID because I worked at an insurance company that had a large derivative portfolio (with options, credit swaps, etc). I've been posting my trades on social media (Twitter/FB) since 2020 so that I can help others.
Options Trading can be viewed as "day-trading" or grouped into the category of "scams". Options are indeed a zero-sum game. However, options trading has many purposes. Some use it to hedge their risk. Others use it to generate income. Some use it for protection or to lock in some of their gains from their stock.
I use the option for Covered Call Income, Cash-secured Put, or Put Credit Spread to create a delta-neutral risk profile on that holding.
Over the last 5 years, I have noticed that my options can produce a predicted income stream, similar to a "dividend," over a long period. There are periods when I lose money trading, but I have never had 3 months in a row of LOSSES. When I zoomed out, looking at a 6-month or 12-month period, I always made a profit in any given 6-month period.
Today (Oct 30) Trades
My trades as of 10:30 am (EST)
Option Trading Income used for more STOCKS
In my portfolio, I use the cash to purchase new stocks. I can either buy a new holding or buy an existing stock to get it to the next 100 lot of shares for the purpose of writing a COVERED CALL.
Here is an example in one of my accounts (Brokeragelink):
I take my profit and I only buy IBIT. I started this a few months ago in this account.
My goal is to see what happens in 5 years of option trading (from 2025 to 2030) and if buying IBIT is a good move. I never add new CASH into this account, and the only way for me to grow this account is either the STOCKS go up or the OPTION Trading generates profits.
Dividend Stocks
As a side note, I use my DIVIDEND differently:
- reinvest the dividend for more shares.
- sell the dividend before/after it hits the account
For some stocks where I have a small position, I will continue to reinvest the dividend. That will help build the size of that holding, especially if you're doing it for 10 or 15 years.
For other stocks, I want to reduce/maintain my holding, and I sell the dividend. I often use that CASH to buy HIGHER GROWTH companies.
In 2025, I have purchased:
- QQQM, WING, CAVA, BMNR, SBET, BYRN, TMFC, RIOT, MARA, GME, etc.
