Selling Put Options On Robinhood - Monthly Income Strategy

okay let's talk about how you guys can

sell put options gonna make this super

simple for you guys and before it get

started make sure you pick a company

that's stable your round you can see

here Microsoft is a super stable stock

you know it's like nice consistent

growth don't pick anything super crazy

like a pharmaceutical stock don't pick

Tesla because it goes up and down a lot

I'll be telling guys a reason why you

shouldn't pick super crazy stocks and

why should probably stick to normal

stuff like AMD Microsoft Starbucks Apple

SP why the super stable company so let's

go to training Microsoft options right

here and you're selling a put and this

is a data game strategy and you will

make some nice consistent monthly income

if you do the right way so instead of

buying a call you're not the buyer

you're the seller so make sure you click

sell and then put it's that easy

choose your expiration date I suggest

you guys would probably pick an

expiration date that's the closest so

you could actually maximize money every

single month keep in mind there oh

there's only four expression dates every

single month for most companies so

Microsoft currently is 184 dollars

you're gonna pick a strike price which

is right here that you think Microsoft

price will not dip below on expiration

date which currently is May 22nd 4:00

p.m. so I'm guessing Microsoft is a

pretty strong stock I'm pretty sure

Microsoft would not dip below one

hundred and eighty dollars so let's

click this one

let's click continue let's click one and

you will receive a minimum credit of a

hundred dollars in this hundred dollars

when you get it filled it goes

immediately to your Robinhood buying

power you could use this hundred dollars

right away to buy more shares or

withdraw it to your bank account and

pretty much buy whatever you want

but there's a catch to it so if you

click review order clearly see you need

eighteen thousand dollars locked in as

collateral why is that

well options contracts are buy a hundred

shares so you can see this strike price

is a hundred and eighty dollars multiply

that by a hundred dollars you've got

eighteen thousand dollars so you have to

have eighteen thousand dollars

locked in as collateral to receive this

one hundred dollars minimum credit so

here's how it goes on expression date

4:00 p.m. May 22nd if Microsoft dips

below you know a hundred and eighty-two

dollars it's like a

$81 that means you want because your

strike price was $180 and Microsoft only

dipped to 181 dollars congratulations

your collateral is released back to you

and you still get to keep her $100 admin

and credit so you're currently $100

richer but you may be wondering what

happens if the share price dips below

$180 let's say it dips over to a hundred

and seventy five dollars this means

you're forced to buy a hundred shares of

Microsoft at the price of $180 the one

you picked even though the current

market price on expiration date is a

hundred and seventy five dollars so

that's about a five dollar loss per

share keep in mind you still get to keep

your minimum credit of $100 because they

give that to you already but you lost

and you're forced to buy a hundred

shares and this is when the collateral

comes in the collateral disappears and

eventually you get a hundred shares of

Microsoft and this is why I stress to a

lot of people make sure you pick a

company that has stable growth because

if that happens to you you could always

just wait it out and eventually stocks

I'm Microsoft will eventually reach

all-time highs and then you'll be okay

and you still make money and you have a

hundred shares of a very good company

but if you pick really crazy stocks like

pharmaceutical stocks like s R and E

like if you screw up stocks like these

could never recover that's why I don't

recommend selling puts for oil selling

puts for pharmaceutical stocks because

if you screw up these stocks you guys

clearly see the five-year line it never

recovers to the all-time highs so that's

about it it's simple as that selling put

options is an amazing way to generate

monthly income I've seen people that

have like a hundred thousand dollars

they make like four thousand five four

thousand dollars every single month by

selling put options and they do it very

consistently and even even if they lose

they get a hundred shares of a

phenomenal company and eventually those

companies reach all-time highs they sell

the shares and they rinse and repeat