Dear Reader: If you have money sitting in a bank account earning almost nothing, you are in luck. Here you will learn a 'time tested' technique of generating regular monthly cash. You notice the phrase 'time tested'. This is because I have been using it for more than a decade, and generated thousands of dollars of cash. Now, in my retirement this is one of my cash cows. So, let's get started.
What are Stock Options anyway? You might have heard from friends, stock brokers or others that they are very complicated and risky. This is exactly what my broker told me when I started. But I educated myself and started slow. I found out that stock options provide a very wide range of flexibilities in managing risk, and one can 'customize his/her risk level' at the very low end, and still make good money. In this blog, you will learn trading stock options by hands on type of experience. This is because I will discuss actual trades that I initiate and follow to maturity. But first let's go over some basics.
As the name suggests, stock options are financial instruments tied to an 'underlying stock'. There are two types of stock options - Call Options, and Put Options. When we talk about trading (i.e., buying or selling) stock options, we really mean trading stock options contracts. One stock options contract = 100 options.
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