Both new and experienced traders want to maximize their investments and earn a profit.
While there are plenty of tips and tricks online that promise quick returns, very few deliver.
If you find yourself wasting time and money with ineffective strategies, it is time to learn which stock market trading strategy is best.
David Jaffee of BestStockStrategy.com has taught more than 1,500 how to sell option premium and earn a consistent profit.
As one of the top options trading coaches, David Jaffee provides a comprehensive options trading strategy that includes risk management.
This practical approach to options trading is easily accessible and can be learned by anyone.
Keep reading to learn why you should sell options to make money trading.
Selling Options is the Best Trading Strategy
You can win up to 98% of your trades by selling options and collecting premium.
Selling options is a better strategy than buying options because there is a lower probability for profit when you buy options.
If you buy options, you will have to win significantly more money during your winning trades to compensate for all of the losing trades.
By selling options, you can position yourself as a casino instead of a gambler.
Selling options has a positive probability of profit, and David Jaffee considers selling options to be the only options trading strategy that is consistently profitable.
Which Stocks Should You Trade Options On?
Once you decide to sell options, it can be difficult to get started.
There is so much information available online about the best stocks to trade options on or the best strategies for success.
David Jaffee is one of the best options trading coaches because he cuts through the noise and confusion by creating a simple watchlist of stocks.
Focus on market-leaders with large market capitalization and liquid options.
This strategy can help minimize risk and improve your probability for profit.
David Jaffee likes to trade companies like Amazon, Tesla, JP Morgan, Microsoft, and PayPal.
Companies with strong brands and large market capitalization are best for selling options because almost all of the available information is already priced into the current market price.
David Jaffee teaches his students how to get comfortable with their watch list and the trading ranges of each underlying.
If one stock is trading at the low end of its range, you can sell a put option. If a stock is trading at the high end of its range, you can sell a call option.
Manage Risk When Selling Options
Selling options carries unlimited risk, especially when selling call options.
You can lose money with leveraged products, but David Jaffee teaches options traders how to manage risk.
While buying options has a defined risk trade, it also has a low probability of profit.
Buying options is like buying lottery tickets. There is a higher probability of losing money the more times you play.
Selling options may have higher risk, but there is significantly greater probability of profit.
Trade Naked Options
David Jaffee also prefers to trade naked options.
While some traders consider naked options to be risky, that is actually a misrepresentation fueled by a lack of understanding.
There are three main advantages to selling naked options.
- Selling option premium with naked options maximizes the premium you are receiving.
- Trading naked options increases the likelihood that you can easily manage and roll that position forward in the event it gets challenged by not spending money on the lower priced put option and having more flexibility.
- Naked options inherently reduce buying power and protect you against the human desire to be greedy. Trading too large gets you in trouble, and you may be forced to close a position for significant losses.
Learn Successful Trader Strategies
If you are wondering which stock market trading strategy is best, it is time to consider a comprehensive online options trading course.
David Jaffee teaches his students how to sell options to earn a consistent profit while managing risk.
From the benefits of selling options to trading naked options, David Jaffee’s options trading course covers everything you need to know for success.
More than 1,500 students have taken David Jaffee’s course, including beginners and advanced traders.
Visit BestStockStrategy.com to learn more and receive $400 worth of free options trading training materials.