Selling options is a consistent, low-risk method for cash flow and semi-passive income. I have been selling options in my dividend accounts and options account for a few years now and it has allowed me to gain extra funds to invest into more dividend stocks.
This page will be used to track a brand new real-money options account from the start. I will post all my trades and keep a tracker of the positions, returns, premiums generated and moves made. The purpose of this is to show how to build an options account from scratch and prove the income generating possibilities with this income strategy.
Options Account Goals
My goal in selling options for this account is to produce a 20% annual return on cash with a conservative approach of selling cash secured puts (CSPs) and covered calls (CCs). My criteria is to sell at a maximum Delta of 0.20 for CCs and -0.20 for CSPs. No other strategies will be used for this account. I will consider using ETFs and individual stocks as opportunities arise.
I have started the account with $12,550 in real money and will be adding $1,000 a month going forward.
What are Options?
Covered calls (CCs) are options contracts that allow another party (the buyer) the right, but not the obligation, to buy the sellers shares at a price (strike price) that is determined by the seller by the date (expiration date) determined by the seller. For offering this right, the buyer pays the seller an upfront cash payment (options premium).
Cash Secured Puts (CSPs) are options contracts that allow the buyer the right to sell their shares to the seller at a price and date determined by the seller. For offering this right, the seller receives the options premium upfront.
For more information on selling covered calls, please read my previous two articles:
How to Sell Covered Calls on Dividend Stocks
Options Account Tracker
Here are the real results of this account for full transparency: