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RobinHood Options Trading Strategies for Monthly Income (Beginner Tutorial) - YouTube
Channel: BestStockStrategy
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Options trading strategies using
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RobinHood that worked for monthly income
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I graduated from the Ivy League
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university I worked on Wall Street as an
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investment banker I completed around
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like comment share and subscribe to this
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video if you have any questions you can
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leave a comment below and I'd be happy
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to answer it so I made another video
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about RobinHood where I actually don't
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like the platform I don't think that
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serious traders you should use RobinHood
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RobinHood however I do believe that beginning
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traders who want to learn can use RobinHood
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RobinHood right and there's no problem with
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using around wounded except for the fact
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that it doesn't allow you to sell making
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options and I believe as I mentioned
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numerous times before that people who
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tell you that naked options are more
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risky than vertical credit spreads or
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other things they are not profitable
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traders you should ask them for their
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way safer than selling vertical credit
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spreads because we maximize your the
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amount of credit that you receive it's a
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lot easier to roll and manage the
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position and it also by selling naked it
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embraces the inherent desire of human
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beings to be greedy so it limits the
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number of contracts that you sell
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because you have substantially more
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buying power reduction when you sell
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naked options that's compared to
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vertical credit spreads however this is
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a RobinHood video and it doesn't allow
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you to trade naked options so what can
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we do the first strategy is we're gonna
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sell vertical credit spreads alright I
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do occasionally trade vertical credit
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spreads you'd probably use it it's
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probably around 10% of my trade mostly
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because I always have a position on in
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Amazon and I do like to use a vertical
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credit spread for Amazon because using a
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vertical credit spread reduces the
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buying power reduction and
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zon is a $2,000 stock as of September
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2018 however all these strategies I'm
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telling you they are good for until the
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end of time so it doesn't matter if
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you're watching this in 2020 to 2025 it
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doesn't matter this is still gonna work
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alright so vertical credit spreads what
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you should do is if you have a small
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account you should watch and have like
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you know five securities on your
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watchlist at one time you should only be
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trading a maximum of two securities
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preferably one so you have five
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securities on your watchlist maybe
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Facebook Lockheed Martin Boeing PayPal
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and one of the gaming stocks let's say a
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TV I write like Activision Blizzard so
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you'll have five you have those five
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securities on your watchlist and at any
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one time you're gonna have a position on
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maximum of one maybe two but I would say
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one you know you only have a position on
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it one I'm one of those securities at
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any one time with a small account so
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Facebook right now is trading at 175 I
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think that's a relatively good time to
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enter in a new position on Facebook
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let's say is trading it falls below like
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$172 you can then sell a put with a
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strike price of $158 and because this is
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RobinHood you would then have to sell a
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vertical credit spread so you'd have to
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buy a lower price play I always focus on
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the entry point whether I'm selling a
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vertical or a naked option the higher
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price put that I'm selling remains the
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same so I would sell a naked option with
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a strike price of 158 and if I was
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turning it into a vertical credit spread
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I would choose I would choose the same
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option 150 $8 strike price for Facebook
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now to turn it into a vertical I would
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probably choose like 150 all I'm doing
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with the vertical credit spread is I'm
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trying to choose an option that would
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reduce my buying power reduction that
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also doesn't cost that much money
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alright because you know that with 99%
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certainty that vertical credit spread
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the option that you're buying is going
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to be wasted money so you might as well
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turn Facebook from 158 dollar stock to
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an $8 stock which means
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you're buying 150 dollar put but you're
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selling 150 a so the difference between
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that is $8 but at the same time you
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don't want to buy a lower price option
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that is going to substantially reduce
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the amount of premium that you receive
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so for example if you receive $1 per
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share by selling 150 $8 put then you
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want to make sure that the 150 dollar
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put that you buy doesn't cost any more
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than like 15 cents that means that on a
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net basis you will collect 85 cents for
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that trade all right the second strategy
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that you should use is you have to make
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sure that you allocate your capital and
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you have very good capital efficiency
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for example let's say you sell that put
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up the vertical credit spread on
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Facebook and it expires in six weeks
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then let's say Facebook goes up to $185
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two weeks from now and that credit
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spread that you sold for a net dollars
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of $85 of an 85 cents a share is now
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trading at 15 cents meaning that you can
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buy it back and for 15 cents you can
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realize let's say you know 85 cents so
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you you you've been able to realize
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around 80
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you know like 80% of the profit yet
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you've only had to spend and have your
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money be at risk for half the time so
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you got 80% of the profit and only half
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of the time and if you wait the
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incremental three weeks you're only
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going to get the incremental 15 cents a
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share in my opinion that is not a good
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usage of capital you should close out
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that position you should then look at
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your watch list and maybe Goldman Sachs
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is trading down from 235 and it fell to
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220 or maybe a TVI has fallen or maybe
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Boeing or Lockheed Martin is fall and
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then you can enter a new position at
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that time remember this is very simple
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we want to keep things as simple and
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easy as possible and you can make money
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in RobinHood but you shouldn't be
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buying options you need to sell vertical
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credit spreads in RobinHood manage your
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capital efficiency and ignore all the
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noise one major flaw that I see in RobinHood
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RobinHood is if it's become so popular that
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I'm part of the Facebook group just
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I'm very interested in human behavior
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and I see people I'm taking screenshots
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of the winning trades that they make by
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buying calls buying calls is like the
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most idiotic strategy because you're
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just gambling right in order to make
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money in the stock market you have to be
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the casino not the gambler so again this
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is a great way for you to make
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consistent money you can make thirty to
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fifty percent every single year by
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selling vertical credit spreads for the
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rest of your life and you will not be
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taking that much risk my name is David
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Jaffee you can go to BestStockStrategy.com
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BestStockStrategy.com and receive $400+
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worth of free training you can enter in
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your email or if you want to subscribe
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to the only legitimate trade alerts
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job and my goal is to be of service to
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other people and I'm not doing that
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because I'm completely altruistic no I'm
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I'm actually doing that because I'm
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selfish I know that when I help other
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people I'm helping myself and it makes
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me feel good about myself
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so if you have any questions let me know
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