hi friends today gonna learn something
really very powerful in investing and
it's gonna really change our life this
is the first time you are hearing this
strategy okay as always you know if
knowledge you really gain the unfair
advantage in anything you do so this is
regarding investment and this investment
this thing I'm teaching you right there
are people that pay a few thousand
dollars for this knowledge I used to be
a investment trainer and I teach people
a lot of different strategies and this
is one of the most powerful strategy
that that's out there if you go to like
money for options account stuff there
are there are causes like packages down
there and something like that will sell
like three four thousand dollars anyway
the money aside what I really want to do
is really benefit you guys a lot you do
need to like understand deep
understanding because energy goes in
practice but you just need to understand
the theory behind it and hopefully you
can actually apply this in your trees
that you do for what about stocks that
it couldn't be out there all right so
without further ado let's start for this
particular video I'll take Tesla as an
example because I'm highly invested in
Tesla and I love their business so I'm
just gonna use this company for example
but there are many other companies you
can apply this strategy to ok so firstly
let's look at the Tesla stoppies KS of
doing this video test our stock price is
$480 you know by the time I release this
video after loss or anything I got this
feeling that Tesla will fly to $600 in
which particular few days I'm not too
sure you know so it may fly 600 it may
drop to 400 dollars I'm not too sure by
core this gut feeling right although I
did say that email lastly I pick a
founder but Tesla is just doing stupid
moves right now and the markets being
irrational or like rushing in the I call
it fear f4 mall I fear of missing out so
probably it goes up it may actually
shoot past like almost nearing like 600
550 600 I'm not really sure okay but as
of now that's last stop right as of
doing this video is $480 and imagine you
have the power to do this
you have the power to buy the stock at
lower than $480 now okay so this
strategy applies this firstly number one
your target price should be more than
the current price so that means to say
let's say you have a vision that Tesla
maybe $1000 in two years or for me I
have a vision that has helped you worth
three to four thousand dollars in three
to four years imagine you're the power
to buy Tesla and a far better price
death then $480 know immediately you win
most of the people out there ready
okay so this is so you must understand
that your target price must be higher
than the current price and if you manage
to buy below this immunity
you win ready okay that is a fake okay
so now the thing we are going to use is
this think up an options contract so
options contract is basically it's a bit
technical you can google this but I just
write off Sadie's but you don't need to
memorize it okay you just don't need
this is just a technical term so an
option contract one contract equals to
100 stocks so I say for example let's
say you're like this one company looking
is a JD jingdong it's like Amazon of
China so if the stock price is at $30
one contract the technical definition of
this contract should be $30 times
hundred so bish is $3,000 if you are
talking about Tesla one contract is 100
stock so 480 times 100 which is $48,000
okay so one contract equals 200 stocks
and like every contract out there there
should be this thing called a great
price so you cannot like agree on no
price order then there's no contract
even your current is health insurance
there's and a great pair of mouth if
something happens to you so there must
be an agreed price and of course with
every contract the there is an expiry
there is no such thing as do you die
contract even okay other than a marriage
certificate which you can actually
cancel it okay anyway other than most
contracts do you have an
definite time line where you will expire
okay I occurrence political year health
insurance you can you need to renew a
video okay so this strategy is pretty
simple okay this thing is we're going to
do this thing called cell put at the
money I'm going to explain this further
later but just understand this we're
gonna sell at the money okay this is a
non leverage play you must remember this
let's say for example you wanna do Tesla
and you want to do like one contract so
you must know how much money you must
have in your account okay because
remember this is a non leverage play so
let's say for example you do Tesla now
with this strategy you got to have yes
you need to have for the forty eight
thousand dollars inside your account
which is 1280 x a hundred K remember
these are the function of cell put means
this once you initiate this move in the
options wall what happens is that you
are telling the options market this I
will agree to buy the stock at the
agreed price and the agreement ends
expiry so for example if I tell you do
sell put at the money for Tesla you will
initiate a sell put four hundred and
eighty dollars that means that you agree
to buy the stock at four hundred eighty
dollars at the end of expiry understand
this I repeat again ask you this if you
initiate a sell put at the money for
Tesla a noun as of doing this video
which tells lies four hundred dollars
now this is what you are trying to tell
the options market you agree to buy the
stock at four hundred and eighty dollars
okay and expiry ends at a particular
date which you choose so to illustrate
this strategy imagine this green shirt
guy is us case me okay I'm also in green
he's very green so now so how does it
look like
see this contract will look like this I
agree to buy hundred stocks off Tesla
shares at $480 Andy there's a Lego to
this expiry which is January 2021 and
the options premium out there is $85
okay why $85 is because imagine you are
agreeing to take the risk to buy the
stock at $40 that is your a this is my
risk
K we are taking this risk of buying the
stock at $480 so because we agree to
this risk we shouldn't do it for free so
people will pay us to take up this risk
so how much they pay us $85 per stock so
for every contract that goes out is
actually $85 500 stock which is eight
thousand five hundred so the moment you
agree this on the options contract what
happened is the person will pay you
money to take on this risk very simple
so how does it look like in your bank
account so what happens is that
currently remember we are not leveraging
because one contract is 100 stock so you
must have this money ready in your
account to take on this risk at any time
whether this thing happens but because
you take on this tree so ripened is that
you have 48 thousand dollars in your
account now and you decided to do this
particular position what happens is
automatically $8,000 $8,500 will fly
into your account and what becomes the
total of it is 48,000 plus 8500 this is
literally free money in your account
free okay you just take on the risk you
get this free money it is unbelievably
like stupid okay this is how it's going
to be done on the brokerage platform all
brokerage will look roughly the same so
this is just the main page here you got
to go to trade
have entry you need to key in your
ticker symbol so in this case since you
are talking about Tesla we are going to
show Tesla so so over here up here is
where you actually buy sell stocks I
don't think I need to teach you how to
buy sell stocks in this case we are
actually doing options so there is an
option chain below here and we click the
option chain so as I taught you guys
that we are going to sell put and we are
going to sell in this case our one-year
put so if you scroll down this is
roughly one year so it's children 68
days of either alright and over here is
where I will show you to sell at the
money put if you look at the arrow bar
just below the arrow you see a small
little cell were there so this
particular action is called a cell so
you could sell at many different record
agreed price or strike prices see you
can actually do a 420 and do a 550 I can
do a 480 I do not want to go into a
discussion on why it's not here why is
not here but I am doing over here so I
just going to outright say that the
reason why I choose this is because the
money puts has the highest time decay
value which we are kind of going after
time decay alright so over here at 480
this strike price here this agreed price
is the closest Christ to the current
stock price where its trading so just by
clicking 480 cell you click over here
immediately you will come out to watch
screen over here and should tell you
like -1 contract because the selling so
is a minus 1 and once you affirm the
price over here you have to click like
components and so if I use a Interactive
Brokers Robin Hood or other platform
that does options all options
chains look exactly the same okay I'm
gonna go back a little bit just in case
see there are calls and puts you see
this calls and put so you got to select
put option you are one year away so this
is 368 days which is roughly a year and
you're gonna sell this price you're the
strike price over here closest to the
and the line price here and in this case
is going to be any four dollars and ten
cents to open clicking this again you
come out to a screen minus one because
it's a sell order you click confirm and
send so on this screen over here you
will see that you will receive eight
thousand and four hundred dollars for
every contract you sell soon you all
need to know this you will receive eight
hundred four hundred dollars in your
account instantly one you to this order
and this order is actually filled in the
open market let's not take a look at the
two scenarios that will happen so
there's only two possible scenarios the
stop by January 2021 will be above $480
or below it so moving one year forward
so imagine you move to the future okay
and the stop drops below $480 so what
what you're gonna do is you know take
$48,000 from your account which you are
supposed to use already to buy the
shares so this instead of buying shares
this money will just float in your
account because remember this is a non
leverage play
so why puns is that $48,000 be taken to
from your account to buy the shares
that's it so you own the shares at $480
at the end of January 2021 but remember
one thing you still have the $8,500 in
your account so that money is already no
account nobody can take it away think
about this way when you buy your health
insurance do you think you can take back
your health insurance money from the
insurance company no it's not it's dance
forever okay so what happens one year
forward and the stock is above $480
nothing happens your account
what plans is that the
you really receive the $8,500 remember
so there is like domina me yours and
your $48,000 in your account you stays
there as free cash so the cash is not
being touched so in total you still have
48 thousand dollars plus the eight
thousand five dollars that you receive
earlier from the year which you already
had your account which you can do other
things with the money this up to you is
your money so I would like to summarize
this particular strategy over here your
worst case scenario is your buy price is
children 95 how wide your worst case
scenario 295 because remember you
received 8500 so you actually pick the
$480 - away the 85 dollars that you
receive so because you really receive
the money we take that as your maximum
like break-even price so your worst case
scenario your break-even price is
children 95 you are already buying lower
than a market at the point of time and
the best case scenario you walk away
with $8,500 this is stupid this is like
win-win for you okay so now I just want
to quickly cover advanced FAQ because
there will be some people who do options
with watching my videos and I've been
doing options for like like five six
years that is professionally and I wanna
just a few like small questions that may
come up in my or if you if I didn't
address in the advanced FAQ just please
leave them in the comments below this if
you don't understand this is your first
time listening to options right if you
you don't understand all these terms
here it is okay you you have not lost
out in anything but I just need to say
it over here for the advanced people
okay why not in the money because in
money basically we are actually
receiving a lot of intrinsic value so we
receive intrinsic value you do not
really in visit the maximum time decay
that is why I do at the money it has the
most time decay and why not OPM again
you
be receiving in physics but you'll be
receiving lesser extrinsic so that the
money was worried after now is the
maximum time decay possible for the
contract so I choose that money okay
again why not manly options then some
once you know you can choose many
different can choose monthly you can
choose weak link and choose yearly by
not money because I want this to be a
very passive movement you can choose one
month is really up to you about one
month the options premiums are like
around $20 is lesser but the thing is
yes I know you can do it every month but
you cannot predict the price movement of
Tesla it goes up and down or any stocks
you just go up and down up and down up
and down so for my experience is the
less you Tasha account the better it is
for your account those people with like
five years of investing the stock market
you understand what I'm trying to say ok
I can all I explain everything in this
one video because it's going to take
like one whole day to do it ok next
thing why not stress plus a lot of
people that does options proceed look at
our IMAX memory stick actually risk
reward
again we are not trading this we are
long-term investors we are stubborn
long-term investors we are doing this
position awaiting for assignment if it
comes to us so this is a square to stop
play I'm not doing like our I account
played no I'm not doing none of those
this is a different topic ok ok why
don't you leverage and why you don't you
hedge it cannot take again I don't
believe he is leveraging because if you
leverage a position like that and if the
stock goes down merging core continually
quickly so leverage is not a play most
investors can take it take it ok this
never sister she the most common way
most people go wipe out your account
so again mix one is why don't why don't
i hedge I can I can fetch the position
by buying puts but the thing is again
advanced people you understand that by
buying put time decay comes in and you
are paying for time decay so there is
not something you want to do so in this
case I'm selling puts to be see the time
decay to my advantage so and
we again summarize we quickly for all of
you this particular strategy is quite
stupid okay it's quite stupidly unfair
your worst case scenario is you buy the
stock unbelievably lower price than the
market already and the best can you walk
away with money okay anyway guys I hope
you liked this video do help give me a
like and you any problems any questions
leave a comment below as usual I'll
answer to all the comments down there
right thank you so much and invest safe