A couple days ago I made $220 in about 5 minutes from trading options. Today I will explain exactly what I did, why I did it, how others can do the same if they wish to, and the risks involved with this maneuver. Out of all the option trading strategies out there, buy write options are probably the least risky, especially done with underlying large cap, blue chip stocks. They also require minimal knowledge, no money down, and are accessible to the general public. 😀
So first, what the heck is a Buy Write options strategy? Simply put it’s when we buy a stock, and then write (sell) a covered call against the stock we just bought heh. 😉
The reason we might want to implement a buy-write is because we believe the stock will not move a lot in either direction in the near future and we want to generate some extra returns in the mean time!
Through a suggestion from a friend I decided to perform my first buy write strategy earlier this week. I chose to do it using the National Bank of Canada, which is one of the largest financial companies in the country with a strong balance sheet and growing profits. 🙂 Canadian banks are ideal for doing Buy Writes with because they are fairly stable and grow their dividends over time.
So let’s quickly run through my thinking process. What is the purpose of buying a stock and then writing a call option against it? For me, it’s to make some quick and easy money with minimal risk, but a high chance to beat the market. 😀