Option Trading - Generating Income and Growing Your Account
I have already been option trading regular for nearly 2 years now and after those months and a really harrowing year of 2014 I can honestly say that generating income with selling options is simple, but growing your account is entirely an alternative matter. After 1000s of trades over almost 2 years, nearly all them combination option trades called "Bull Put Credit Spreads," I've generated a great deal of income but because of recent events starting in October 2014 following the ALIBABA IPO came out and the next dive in October due to the EBOLA virus it's not been easy to boost the general value of my account. After October the big dive in gas prices has been the next great challenge for all in the stock market.
By mid-September 2014 I was very happy with the general gains in my own account, but since then whilst the income generated by the up and downside of this year's stock market, the growth in my own account has not been as good as I might have liked. Today following the recent rebound in late December 2014 I'm back again to the lows of April of this season, still maintaining the exact same strategy, record keeping and effort that's maintained the income flow for nearly 2 years. One mistake I did so make this season was to possess way too many energy stocks and ETFS which have recently gone down very hard. As I have already been getting stocks put to me this season, I have already been taking profits or losses where necessary and sometimes rolling them out to later months option trading tips. In some of those cases I really made additional make money from losing in the stock vs the income generated by selling the PUT in later months as a result of time value in selling the later month PUT.
I have previously tried another PUT strategy called PUT debit spread with the stock TSLA and I think that this strategy could very well be safer compared to the credit spread idea.
Another error I've made this season is sometimes raising my PUT strike price as much as excessive of a difference involving the PUT that I sold to protect my downside which I do whilst the stock goes up. For 2015 I may well be more careful by using this specific income generation strategy.
The best thing about option trading is that there are many combination strategies which maintain my curiosity about this new profession. Combined with the record keeping and research on stocks that I do, my new profession after I retired from being a computer software developer for 30 years has been overall a great new career. It sure beats sitting in an office all day long. Now if we could just get rid of these constantly repeated CNBC commercials!