Sail towards your own financial security

The book is a detailed explanation of how you can sell options for income using investments you may already own.  We sell options, we don’t buy them, and we do it with simple, stable and conservative strategies that generate an income while preserving our assets.

Yes! I see that Schwab is once more giving away $100 to $500 to open an account, if you use this referral code:

http://www.schwab.com/public/schwab/nn/refer-prospect.html?refrid=REFER7CJ82Q96

I recommend Schwab ‘Street Smart Central’ in the book, for reasons outlined in the book.

I don’t know how long this will last.
I don’t get anything.
I won’t know if you open an account, that is all private information.

It’s just a marketing tool that Schwab uses and you are welcome to it.

Start small by selling one put contract on a low-cost stock. An option contract require 100 shares of stock per contract, so for a $50 stock, $5000 is about the lowest that works. Remember, you’re not ‘risking’ this money, you are investing it in a security in the stock market that you choose. Get comfortable with trading then you can slowly increase your position.

Nope. I wrote this book to help friends and acquaintances with their finances. If you would like in-depth support and/or training, there are many excellent sources of subscription services online. Check the ‘Resources’ section in the book.

Consider what happens when you buy a house and rent it out.  You buy the house at market price and you are locked into that purchase price.  Now that you own the house, you have to ride out the ups and downs in the home’s value as real estate values fluctuate.  There’s nothing you can do about the purchase price or changes in real estate values.  Everyone considers this normal for rental property.  The upside is you collect rent every month, right?  That’s why you bought it in the first place, the rental income, as well as any potential future price appreciation.

Now think of your stock market investment as a house.  You buy an ETF fund and you are locked into that purchase price, and as with real estate, you are subject to the ups and downs of the market.  We accept that as part of being in both markets, real estate and the stock market.  As with the house, we hope for future price appreciation.  But other than possible dividends, your stock market investment is not generating any income.  When you begin to sell options on investments you own, you are now collecting rent.

You have assumed risk by buying the house.  Real estate could crash, a toxic waste dump could go in next door, whatever.  You have assumed some risk by owning that asset.  The risk in selling options is much like that of owning the house; the value may go up and down but you are not going to lose your stock market investments when you sell options anymore than you risk losing the house by renting it out.

Holding stock market investments and not selling options on them is like owning a rental house and letting it sit empty.

When you buy an option you are making a bet that your stock will move in the direction (or stay inside a range) you want inside the time frame you’ve chosen.  If you are not correct on both counts, you lose cash.  When we sell an option the value of our holdings will move up and down with normal market fluctuations but we do not lose cash.  Buying options uses leverage and so can produce spectacular results, and some traders certainly make it work, but there is a lot of complexity, skill and luck required.  There are books available if that’s what you want to learn.  However, ‘Smooth Sailing with Options’ is not that.  It is my simple method of selling options for a steady income.

The stock market never drops. It only fluctuates. Once you grasp that concept you are an investor. Those who try to time the market and who fret about it being ‘too high’ or ‘over bought’ or whatever jargon they come up with suffer from short-termism. Stock markets have oscillated since the first one began in the late 1400’s.  If you aren’t comfortable with that you should probably find a different way to invest.  For an options seller or a long-term investor, the market never drops.  It fluctuates.  Keep in mind: Options sellers profit from price volatility rather than just absolute price levels.

“Those who do not learn from the past are doomed to repeat it.”  Does no one remember Hertz stock in 2020?  Or the dozens of others that have crashed after a pump ‘n dump?

Do you mean Bitcon? Bitcoin makes the news almost every week with yet another billion dollar scam revealed, a new criminal hack, a bitcoiner going to jail, passwords stolen, or another report of forgery.  You sure don’t hear that kind of news about the Federal banking industry.  Mining bitcoins sucks electrical power like a dead short, putting a load on our already stressed grid.  And for what?  It’s making a select few con men very rich.  There is investing and there is gambling.  Bitcoin is fine as long as you are aware you are gambling, not investing. Los Vegas casinos are also gambling, and are a lot more fun.

Calculating gains in a taxable account while options trading can get complicated.  So we only trade in tax-protected accounts like a roll-over IRA or a Roth.  In a tax-protected account you are only taxed when you make withdrawals.  That eliminates the entire problem.

No.  You can set up trades to look at possibilities, but never put in an order when the market is closed.  The stock market can change overnight and open higher or lower than expected and ruin your trade.

Of course! There is an email link available. I can’t guarantee that I can answer your question but I’ll do my best.

No, but I did own and sail one much like it for a number of years. It really is that beautiful out there.