Hey AI Option Gurus,
It's time for some Thursday Tips in your investing journey..
This week has been a good week for the stock market as the Fed cut the interest rate by 0.5% (or if you want to sound smarter, 50 basis points !).
This news has reassured the market and we are on an upward trajectory with all the Mag8 stocks showing surge in prices.
This week we focus on a couple of important ideas in our options trading journey. The first is to know when to close a trade, especially if its a profitable one.
Time vs Money
When you open a cash-secured put on a stock like NVDA, it often shows a profit within days, no matter the expiry. It’s tempting to hold on until expiry to squeeze out that last 100%, but here’s the question: is it really worth waiting a week or more for the final 30%?
If you’ve already locked in over 70% profit, it’s usually smarter to close the trade, take your gains, and free up your collateral. That way, you can jump into another trade or cash out when needed.
Bottom line: Don’t wait until expiry if there’s more than a week left and you’ve captured 70%+ profit on the premium.
Use the Wheel!
Consistency is key. Use the wheel strategy on reliable stocks like $AAPL $NVDA $GOOGL to generate monthly income by repeatedly selling puts and covered calls.
You can sell a put for about 30 delta for two week or more expiry and if assigned, open a covered call for again a 30 delta for a month expiry. The wheel works!
Options trading might seem complicated, but when you break it down and stick to the basics, it's a great way to create consistent income. Watch the market, time your moves, and above all, stick to the principles we've covered.
If you want to review your trades and get real-time ideas for new option trades then join me weekly on Tuesdays and Thursdays at 7.30 am PST for the 30-minute Weekly Option Review (WOR) session.
You can sign up and book your weekly classes here: www.appmosis.com/subscribe
Remember, trust the process and don't get emotional with your stock or options. Close those trades early when you can!
Happy Trading!
Gautam GodseFollow me on X/Twitter at @aioptionsguru
Appmosis Investing – Options Trading for Regular Income
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