How I make $2500+ per month in passive income

Описание: How I am using my existing positions to make some passive income to pay my monthly expenses. In the next two video, I will share my strategy on how I am using leveraged ETFs to make a decent chunk on change.

INVESTMENTS
Open new M1Finance account (get cash): https://m1.finance/0ulBJlVUTwr9
Open new Robinhood account (get stocks): https://join.robinhood.com/rajivm23
View my Portfolio: https://drive.google.com/file/d/1_QMH...

SCRIPT
Imagine getting paid on stocks or ETFs you already own. I not talking about dividends but a chunk of change in addition to dividends
In my next two videos, this one and the next one, I will share my strategy how I generate weekly income on my existing leveraged ETF positions
It is based on covered calls. And if you know anything about options, it is a pretty popular strategy. Now this strategy can be applied to any stock or ETF you own but as I have discovered it gets really interesting with Leveraged ETFs
In this video, I will cover the basics of covered call strategy, how you can set this up on Fidelity and key points to remember so that you can successfully generate a steady income
Watch the video for more
Few things you should know when considering covered calls. And I will walk through an example in Fidelity to bring all of this together
You need to own at least 100 shares of a stock. Every option contract = 100 shares. So with 100 shares you can write 1 contract. 1000 shares = 10 contracts. Premium on options chain is displayed per share
Three values are super important when picking an option - Implied Volatility, Open interest and Delta.
Implied Vol measures how much movement there has been recently in option prices. Higher the Imp Vol = Higher Premiums
Next, Open Interest - You want to get into options with high open interest. This means there is liquidity and spread between bid and ask or what people are willing to pay for or sell at is tight.
In simple language, high open interest means you will be able to open and close positions at the prices you are looking for
Finally, delta - It tells us, how much the contract price will move per dollar move in stock. It also gives you a rough probability of the contract expiring in the money.
Lower the delta = better chance of success with covered call. But as you go lower so does the premium you can get.
The sweet spot of delta in my opinion is 30-35%. It’s different for leveraged ETFs. More in my next video
To open a position or write or sell a call, you are going to pick ‘Sell to Open’. To close, ‘Buy to Close’. Of course, you can let it expire worthless
Get smart - tips, taxes and some strategies
Avoid writing calls during period of earnings. Earnings means sudden price changes. You want to keep things as predictable as possible
You can close your position early. You don’t have to wait the entire month. If you have captured 85-95% of the premium, close the position, ‘buy to close’ and move on to the end month. Keep collecting more premium
Put a ‘buy to close’ order right after you sell calls. This way you can automate closing you position
Have a process in place. Bookmark watchlists, option chains, automate where possible and get consistent. Remember, our goal is to generate monthly income.
So get organized and do everything you can to keep those shares and collect premium month after month
Don’t forget taxes. Income or loss is recognized when the call is closed either by expiring worthless, by being closed with ‘Buy to close’, or by being assigned where you are obligated to sell the stock
Premium is taxed as short term capital gain when you ‘buy to close’ and close your position. If the call gets assigned, and you had the stocks for over a year, it will be tagged as long term
You can do this in a IRA account and it is smart to do it in a Roth IRA since you don’t have to worry about taxes
Remember, you can never lose money doing covered call and if done right, it can end up being a steady source of income
In the next video, I am going to talk about how I use covered calls with leveraged ETFs and knowing how the world hates leveraged ETFs, I am probably the only guy who does this
DISCLAIMER - I am not a Financial Adviser or Tax Professional, the information provided is my personal opinion and should not be considered professional advice.

MATERIAL LINK
Video includes material from Glabalxetfs - https://www.globalxetfs.com/content/f...
#thinkfinance #coveredcall #leveragedetfs