How I Made USD$9,827 In 3 Trading Days Using The Easiest Option Strategy

This is a very simple options trading technique that all options traders will learn when they first get started on options and it is “Cash Secured PUT“. In this article, I will share with you how I use Cash Secured PUT (CSP) to generate almost USD$10,000 in 3 trading days.

On 26 Nov 21 (Fri), when the market was selling down due to the fears of Omicron variant, I sold a Out(of)-The-Money (OTM) CSP on Tesla (Strike Price $1000, Expiration 31 Dec 21) and collected a premium of $5,250.

The following Monday, 29 Nov 21, the stock market rallied and Tesla gained about 5% in share price. I saw that the premium value for my CSP contract has dropped and so I closed the contract by buying the CSP contract for a premium of $3,650. Therefore, I earned a profit of $1,500 on one trading day. On the same day, I sold another Tesla PUT contract (Strike Price $1100, Expiration 31 Dec 21) and collected a premium of $7,200.

On the next day, 30 Nov 21 (Tues), Tesla’s share price increased by another 3% in the opening hours. I saw that the premium had dropped again and thus, I closed the contract yet again by buying the CSP contract for a premium of $5,723. By closing the contract, I earned a profit of $1,477 within a day.

Lastly, I sold another Tesla PUT contract (Strike Price $1100, Expiration 7 Jan 21) and collected a premium of $6,850.

So, in 3 trading days (26 Nov, 29 Nov and 30 Nov), I have earned a total of $9,827 by using the simplest options technique of selling Cash Secured PUT on a single stock (Tesla). This goes to show that you do not need to learn complicated options trading techniques like iron condor, iron butterfly or other complex credit/ debit spreads to earn money in options trading. All you need is to know the basics and pick the right stocks that can help to grow your wealth exponentially.

Related Articles:
Trading Activity On 26 Nov 21: Profits, Loss & A Tesla PUT
Trading Activity On 29 Nov 21: Closing TSLA PUT For 1.5k Profits
The Newbie’s Guide To Options Trading
Revealing All My Trade Records for Year 2021 (USD102k Profits)

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Keen to learn about options trading but do not wish to pay for expensive courses, this newbie guide will help gain the knowledge and fundamentals to understand options better. And it’s totally free!
The Newbie’s Guide To Options Trading

The LEAPS Strategy has helped me make more than USD120,000 in 2021. Here’s all you need to know about this strategy that can help you increase your wealth exponentially:
The Ultimate LEAPS Options Thread

Looking for ideas on what stocks to invest in or which stocks to trade? You can take reference from what I have been buying or selling. I try to update them as soon as I can in this section, as well as share my thoughts behind executing these trades:
MY TRADES

Excited to start your trading journey or perhaps try out with a paper trading account to build your confidence in trading? Check out this step-by-step to help you get started:
How To Buy Options on Interactive Brokers (Step-By-Step)

I watched tons of videos on YouTube since 2020 and if you are wondering if there are any useful channels that you can subscribe to for learning market trends, TA, FA, check out this compilation here:
My Secret Weapons For Options Trading: I Watch These YouTube Financial Channels Every Day

I concluded my first year of options trading with more than USD160k of gain, see how I do it and the capital I use for every month to give you a sensing of the percentage yield I get out of my gains:
1st Year Options Trading Recap: The Journey Towards SGD$217,509 Profits In 2021

This blog is as authentic and as transparent as I can share, I do not just show the wins and hide the loss. I have made some very bad decisions in the first 8 years of investing and paid a huge price for them. Here is the loss I have accumulated during these years. I hope you learn some lessons from my mistakes.
I Cut $135,715 Worth Of Losses In The Last 1.5 Months

10 thoughts on “How I Made USD$9,827 In 3 Trading Days Using The Easiest Option Strategy

  1. Hi Jason,
    Am I correct that you would need either $100K buying power in your account, or already hold 100 TSLA shares, before you can execute these trades?

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    1. Hi Maurice, yes you are right, to sell a Cash Secured PUT, you will need to have the cash available, just in case the contract gets exercised. Thus, you need to have 100k as collateral to execute the trade. If you are holding 100 TSLA shares, you can sell covered call against it. This article will give a more thorough explanation:
      https://learninginvestmentwithjasoncai.com/2021/11/17/why-are-call-and-put-options-commonly-known-as-covered-call-and-cash-secured-put/

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    1. Thanks for the suggestion. The reason of selling OTM PUT is because I am hedging against Tesla going sideways or even going lower. So if Tesla goes up, I keep my premium and collateral, if Tesla stay stagnated or go down by a little, I still have some leeway. Otherwise, I probably be selling Tesla LEAPS instead.

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  2. Hi Jason, I’d I’m not wrong by selling a put at $1100, you are agreeing to buy the shares at that strike. Does the contract get assigned (provided you don’t do anything) only if the stock price goes over the strike or is the other way ?

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