Wheel Strategy with Options: Selling Options for Income

In this video I explain the wheel strategy using options to create regular passive income in the stock market. I go through all of the details of the wheel strategy and show an example of the starting trade for the wheel strategy on Robinhood. This video is great for people who are beginners to selling options as well as people who are experienced in options trading.

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Overview of the wheel strategy (selling options to create passive income):

► We start by identifying the stock we want to use for this strategy. The stock should be a stock that you would be happy owning for a considerable period of time, has options trading available, and is at a price in which you would be comfortable purchasing 100 shares and have the funds in your account to do so

► Next we start phase one of the wheel strategy - selling a cash secured put option to generate income. Note: selling a cash secured put option means 1) that we have cash in the account to cover buying 100 shares of the stock at the selected strike price 2) we are selling someone else the right but not the obligation to sell 100 shares of stock to us at an agreed upon price (the strike price) at any time before the options contract expires

► If the put expires worthless, meaning the stock price closes above our strike price at expiration, we sell another cash secured put and generate more passive income. We continue this process until the stock price closes below the strike price at expiration and we receive 100 shares at the strike price

► Once we have our 100 shares of stock, we immediately sell covered calls to generate income again. Note: selling a covered call options means 1) we have 100 shares of stock for each call option contract that we sell 2) we are selling someone else the right but not the obligation to buy 100 shares of stock from us at an agreed upon price (the strike price) at any time before the options contract expires

► If the call expires worthless, meaning the stock price closes below our strike price at expiration, we sell another covered call and generate additional passive income. We continue this process until the stock price closes above the strike price at expiration and our 100 shares are sold at the strike price

► We then go back to the top, and begin phase one of the wheel strategy again and sell a cash secured put option and start the entire cycle of the wheel strategy again

🔴 Note: You will need an account that is approved for trading cash secured put options and covered call options. Robinhood and Webull both offer such accounts.

💰 If you do not have a Robinhood account or Webull account use the links below to get free stock once you sign up and fund an account - these platforms both have free options trading

💰 Get FREE STOCK on Robinhood: https://join.robinhood.com/masonp2
💰 Get 2 FREE STOCKS on Webull: https://act.webull.com/t/8bBWMfEzZIsK/1i5/

Check out my video on passive income ideas where I explain 7 passive income ideas: https://youtu.be/4b5qRTkaNRg

⚠️Tickers Mentioned: $MGM

Disclaimer: This video and description may contains affiliate links to products or services that I use. If you choose to use these links, I may earn affiliate commissions at no additional cost to you. This video is not investment advice and is purely for entertainment purposes only. Before you make any investments, please do your own research. All of the opinions in this video are my own.

❓ If you have any questions, ask in the comments below, I read and respond to all comments.

Background Music Inspired by Kevin MacLeod
Link: https://filmmusic.io/song/3918-inspired
License: http://creativecommons.org/licenses/b...

Видео Wheel Strategy with Options: Selling Options for Income канала Money with Mason - Personal Finance and Investing