hey what's going on youtube and welcome
back to tech conversations i'm your host
guillermo it is november 14th hope
you're all having a great weekend so far
in today's video i want to talk about
some of the best small account options
strategy so before i get into that all i
ask is that you guys hit the like button
down below and subscribe guys it really
helps out the channel check out the
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great resources one of them is our
alerts here's an example of an alert
from last week this was a put option on
aal we paid 111 we sold for 180. so you
made a 69 profit per contract on this
alert so check out the discord link to
it in the description below and remember
guys before you ever enter any options
trade please make sure you know how to
close it most of the time you're going
to want to exit your position before it
expires now the reason i'm making this
video is because there's been a lot of
people that think that you need
thousands of dollars to trade options
and that's just not true you can
literally trade options and enter some
strategies with just five dollars and so
again i'm going to talk about three of
the best small account options strategy
so let's get into the first one right
here and so ultimately with all of these
strategies uh all these three strategies
we're going to talk about here today
you're going to want to find a sideways
moving stock in other words a stock with
low volatility that doesn't really move
too much it basically stays within a
defined range and so what i'm going to
do is i'm going to do i'm going to first
choose ticker symbol pl tr so this is
palantir technologies now palantir
dropped a lot in the last week due to
earnings but uh for the most part you
know most of the time it doesn't really
move a whole lot and it doesn't move
very quickly it's kind of a slow mover
so this might be potentially a stock you
could use for this strategy again these
are just examples i'm showing you here
so please don't copy these exact same
trades but just so you guys can get a
better understanding as to how these
work so i'm going to use palantir here
for this first strategy so once we found
a stock that we like a stock that we
think has low volatility that doesn't
move too much we can actually go into
the options for that stock so let's go
ahead and do that here
so the first thing we need to do here is
choose an expiration date now when it
comes to me uh since again we really
don't want this stock to move much i
like to choose the closest expiration
date because the longer you know the
farther out you go
the more events that can happen between
today and that expiration date that
could potentially cause the stock to
move a lot so i like to always choose
the closest expiration date to me so i'm
just going to leave it as november 19th
now what we want to do here
is we want to go over to the puts here
first because this first strategy will
involve put options and what we want to
first do
is we basically want to pick a price uh
that we believe this stock will be at on
the expiration so again our expiration
is november 19th i want to pick a price
that i believe the stock will be at on
the end of the day of november 19th and
so since i do think this is a low
volatile stock it's gonna move sideways
i'm gonna say that i believe palantir
will be at 23 a share on uh the end of
the day of november 19th which is my
expiration so once i've kind of
determined that price
next thing i want to do here is i want
to go ahead and start by selling up two
puts at that strike price so
if i think valentine will be at twenty
three dollars at the expiration i'm
going to go ahead and sell puts at that
strike two of them and i'll show you
here how you can change the amount of
contracts you want so i'm going to go
ahead and sell this put i'm going to
sell two of them here now for selling
this i'm getting 67 and i'm going to
sell two of them now the next thing i
want to do is i want to switch over to
buy now and what i want to do is i want
to buy a put above this uh the two puts
that i'm selling so buy it put above
right here and then i'm gonna also buy
put below so i'm gonna buy put right
here now something that's important here
is that these two that i'm buying need
to be the same distance away from the
puts that i'm selling so since i bought
this one here this is 0.5 away the one i
buy down here also needs to be 0.5 away
so that's very important that you do
that so that this works properly now
now what we can do is we go over here to
this drop down go to custom because
remember we want to sell two of these
not just one so we need to switch this
to two and so this is what it's going to
look like here so let's take a look here
so notice that my total cost here is six
six dollars that's all i need to enter
this strategy so you can see i can trade
options here with just six dollars very
cheap here and basically if we take a
look down here at our profit and loss
chart uh that's going to be our max loss
six dollars a max profit is forty four
dollars so we're risking six dollars to
potentially make forty four dollars here
and we can take a look at our breakevens
on the downside 2256
on the upside uh 23.44 so as long as
we're between those two prices at
expiration we'll end up making some
money ideally on the expiration we would
want palantir to be at 23
a share so that's the first strategy
here that i wanted to talk about now
remember always important to go to
option strat and visually take a look at
what this trade looks like uh you can
visually see what your profit or loss
will be depending on the date depending
on what price the stock is at you can
also you know
take a look at you know how implied
volatility will affect that uh that
particular strategy so always go to
option strat before you actually enter
the trade and take a look at what that
looks like i'm not gonna do that here
today uh but you know always important
to take a look at that now let's go back
here
and let's take a look at the second one
on today's list so what i'm going to do
is i'm going to go to a different stock
here so same thing
with this one right you want to find
these sideways moving stock stock that
doesn't move a lot low volatile stock so
that uh you know it doesn't move a lot
again all these three strategies are
neutral strategies here so the the next
stock i'm going to use is going to be
ticker symbol s k l z so it's going to
be skills so let's go over the skills
and again skills you know one of those
that you know really doesn't move a
whole lot uh you know if we take a look
in the last three months you know for
quite some time
you know it really didn't move a whole
lot here right kind of stayed stable
it's been slowly slowly climbing up uh
but you know it hasn't you know
had huge drops or huge spikes other than
you know when it comes to earnings so uh
you know skills potentially might be a
good stock for this strategy that i'm
showing you here so again this is just
an example don't copy it let's take a
look at what this one would look like so
again i'm going to go over to the
options here for this stock so let's go
over the options here for skills again i
want to choose an expiration date i like
to choose the closest one to me because
again the farther out you go the more
things that can happen between today and
then and that could cause the stock to
really change in price so i like to keep
it as close as possible uh so i'm going
to again leave it as november 19th for
this one we are going to be utilizing
calls so leave it on with calls here and
similarly like last one what we want to
do is you basically want to pick a price
that we believe this stock will be at on
or expiration so again at the end of the
day on november 19th what price do i
think skills will be at now right now
it's at 12 49 so let's just say that i
think it's actually going to be at the
same exact price on the expiration date
at 12.50 so again what we're going to do
is we're going to start off by selling
now we're going to sell three calls at
that strike so if i think it's going to
be 12.50
at the expiration date i would start by
selling three calls at that strike price
so here's the 1250 strike i would go
ahead and sell three of these so i'm
going to get 63 and i'm going to be
selling three of these so again we'll
switch this over to three here uh but
let's actually continue our uh to set
this one up here so now what we're going
to do is we're going to switch over to
buy and what we're going to do is we're
going to go up one strike so from 1250
to the next one which is 13 and we're
going to buy two calls at that strike so
i'm going to go ahead and click on here
we're going to be buying two calls here
okay and again
we'll go ahead and modify the number of
contracts here but let's just finish off
this strategy so now we're going to go
back to the calls we're selling we're
going to go down one strike and then
we're going to go down another one so
we're skipping one strike going over to
the next and we're going to buy a call
only one here okay so we're buying this
call is going to cost 118
so now that we've done that we can go
back up here to our drop down and we're
going to go back to custom here
and then again remember we wanted to
sell three of these calls at the 12.50
because we think the stock will be at
12.50 on expiration so we would go ahead
and choose three here instead of one
and then remember we wanted to buy two
of these calls at the 13 strike the
strike above the calls that we're
selling so we'll go back here and
instead of buying one of these we're
going to go ahead and buy two so this is
what this one will look like so again
look at the total cost here nine
nine dollars that's all i need to enter
this particular strategy and if we take
a look down here at our profit and loss
chart we can see
max loss is going to be
ten dollars depending on where you get
filled
max profit ninety dollars if you get
filled for nine it would be ninety one
dollars so again you're risking nine
dollars here to make ninety one dollars
that's a really nice reward to risk
ratio in my opinion now we take a look
at our breakevens on the downside 1160
and then on the upside 1295. so skills
would have to drop over seven percent or
go up or you know almost four percent uh
for me to not make money with this
strategy and ultimately on the
expiration date ideally what we would
want to happen here is for skills to be
at the price of the strike of the calls
that we sold right if skills were at
12.50 that's we're going to make our max
profit here which would be 90
so again as you can see very cheap
strategy for small accounts here you
don't need hundreds or thousands of
dollars to use strategies uh to make
money right you you literally need six
ten dollars to enter some of these
strategies here uh now let's go on to
the last one here on today's list it's
gonna be similar to the first one but
there are some differences here so again
similarly to the last two you want to
find a sideways moving stock stock with
low volatility stock that doesn't move a
whole lot so what i'm going to use for
this last stock i'm just gonna again
just use uh ticker symbol g
uh p
r o that's gonna be go pro now go pro
just had earnings so it is up quite a
bit this last week you know but before
that again you know as a stock that
really doesn't move a whole lot so this
could again could be a potential stock
for this strategy here but again this is
just an example i'm showing you so now
after we found our stock again you want
to go into the options again you want to
choose a proper expiration i'm going to
choose again the closest expiration uh
to us which is november 19th now this
one is actually going to involve both
calls and puts so i'll start off with
the calls here and then we'll switch
over to the puts so again what we're
going to do similar to the last two
right these are all very similar uh in
terms of setting up but they all have
some differences some pros some cons but
with this one again we're gonna
pick a price we believe this stock will
be at on the expiration so let's say
that on november 19th we think gopro uh
will be at 11.50 which is basically
where it's at right now right it's at
11.51 let's say on expiration again
since you know we don't believe the
stock will move a whole lot it will be
at the same exact price that it's at
right now so what i would do then is i
would start by selling one call at that
strike so 1150 is right here i would go
ahead and sell this call here get 20
bucks for selling this call then i'm
going to switch over to buy i'm going to
buy a call and i'm going to buy a call
right above that at the 12 strike so
i'll go ahead and buy this one right
here right then what i'm going to do is
i'm going to switch over to puts now and
what i'm going to do is i'm going to
sell a put again at the
at the 1150 strike at the price that i
think the stock will be at on the
expiration so i'm going to get 60 bucks
here and then i'm going to buy put
with a lower strike than that put i just
sold so at the 11 strike right and again
these are all equidistant they're the
same distance away from each other
they'll 0.5 away from each other as you
can see though right here you know one
difference between the la this one and
the last two is that we're actually
getting a credit for this one so instead
of paying you're gonna get a premium
here but you will need to put up a
collateral in this instance i would have
to put up fifty dollars in collateral
but then i'm gonna get forty five
dollars as a premium so what that means
is that my max loss would be you know
four or five dollars as you can see down
here we're risking four dollars in this
one to potentially make 46 dollars so
again very nice uh reward to risk ratio
and again if we take a look at our break
events it would be 1104 on the downside
on the upside 11.96 so gopro would have
to drop four percent or go up about four
percent uh over four percent to you know
for me to not make any money here and
the most i could lose is four bucks so
as you can see you don't need a ton of
money uh for some of these option trades
right for these that i'm sure that i've
showed you you know you can do it with
four ten dollars or so uh so again these
are some of the cheapest plays for
smaller accounts uh they are a little
bit more advanced so obviously if you're
a beginner these may not be the best
strategies for you but if you know if
you've been trading for a while and you
know you have a small account these are
definitely some strategies to look at so
anyways if you have any questions about
anything i just talked about feel free
leave them in the comment section below
check out the discord link to it in the
description below hope you enjoyed the
video let me know what you guys think
and i'll see you guys next time