How to Make Money from Sideways Stock Moves by Selling Option Premium

★ SUMMARY ★
Typically you make money through selling options. It’s through options that you can make money from a stock moving sideways…

If you’re just buying and selling shares of stock, you typically can’t make money if your stock is moving sideways. You need upward or downward movement to capitalize on the long or short position from your stock trade.

With options, you get more flexibility because you can capitalize if the market is moving sideways. You can even make money if the stock is going up or down.

You sell option premium to achieve this. There’s a few different strategies you can use, and some can get complicated…

Option Premium
Option premium is like selling insurance. Insurance has to continually be paid over time – as life progresses, you have to constantly pay for insurance.

If you buy your insurance premium at an older age, it will be more expensive compared to purchasing in your youth. If you’re selling option premium, you’re selling premium on a stock. This is a great way to capitalize sideways movement!

I want to share a few strategies…

Posted at: http://tradersfly.com/2014/12/make-money-sideways-stock-moves-selling-option-premium/

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4 COMMENTS

  1. I also get confused with the nomenclature. It seems being long a condor or butterfly does not necessarily mean you paid money for it or vice versa. It seems quite the opposite in these double spreads. With vertical or horizontal spreads, if you are long, you paid for it (debit spread), if you are short the spread, you got paid (credit spread).

    Sometimes when people say they are short, it may mean they want to sell it or short it. Sometimes it means they have a negative delta. Or it means they think it is going to decrease in value. Maybe its time for a video going over the different meanings of the word short and long.

    Thanks for all your videos.

  2. Thanks for all your great material. I was wondering if you trade the Forex market? Also I had a question about becoming profitable in this business. – Would it be a real test of ability to grow a very small account like say a few hundred dollars, rather than maintaining and growing a really large account like over 20 thousand. It's just one of those questions that I have in the back of my mind that will help me gauge how difficult this business is. Thanks again for your contribution, since watching your stuff I have really been studying volume very closely. Thanks.

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