I recently had the privilege of talking with Todd Mitchell – the founder and CEO of Trading Concepts Inc. His insight into trading options and how to utilize weekly trades for a boost in cash-flow were truly inspiring! His passion for teaching others the art of trading was evident as he shared strategies for keeping yourself accountable while trading and how to watch for the best times to collect premiums. I am excited to share our conversation below!
Video Version of the Podcast
Outline of This Episode
- [1:00] Todd Mitchell: Founder and CEO of Trading Concepts Inc.
- [1:36] Inspiration to trade from entrepreneurial father.
- [4:03] Teaching trading becomes Todd’s passion.
- [6:38] The importance of accountability in the trading game.
- [7:49] Utilizing a trade log to better trade strategy.
- [11:47] Trading options as a vehicle for weekly cash flow.
- [12:11] Weekly Trading options allow for weekly cash flow.
- [12:41] The power of the naked put.
- [17:48] Watching your premiums.
- [20:17] Utilizing trading calls to keep your trade diverse.
- [23:59] How to get in touch with Todd Mitchell.
Resources & People Mentioned
Connect with Todd Mitchell
- Todd Mitchell’s Phone Number: 248-320-1115
Trading – the best thing in the world
Todd Mitchell absolutely loves trading. He grew up helping his entrepreneurial father chart the stock trends from The Wall Street Journal and began trading in college. He’s never had a “real” job but has instead made his living from trading and teaching others how to partake in the fun! He loves seeing people he has taught become successful and says that it inspires and motivates him to always be improving and learning. Which is what we try to do as well – learn new ways to increase our cash flow and improve our lives! Todd loves trading because of its diversity, flexibility, and easy access.
The discipline of keeping yourself accountable in trading
With all the options and strategies out there, I asked Todd how he keeps track of what works. His answer was spreadsheets – a trade log in which to track every move you make with a share or ETF. A trade log makes it easy to visualize your trade strategies. When did you go into a trade? When did you sell or get out? Being able to see the equity curve helps you keep from making the same mistakes over and over. Todd shared that he keeps different spreadsheets for different strategies. This allows him to calculate if he is growing better as a trader, remaining stagnant from month to month, or even declining in effectiveness. Being able to visualize where you are at allows you to make objective decisions. Just as in any other discipline, you need some form of measuring stick to motivate you towards improvement.
Puts and calls: the art of optimizing option strategies
Todd explained that taking advantage of different trading options can bring you cash flow every month and week! With weekly trade options, you can boost your cash-flow every week instead of having to wait until the end of the month or till your share expires. Understanding puts and calls is key.
Selling naked puts is the “holy grail” of trading options, in Todd’s view. Since you only sell naked puts on stocks that you wouldn’t mind owning anyway, you aren’t running the risk of ending up stuck with an option that you don’t want or that will hurt your portfolio. Selling directionally is important. If you buy a 50 cent put, if the stock rises by 30 cents, you have a great profit! If it sells at 50 cents, then you break even. Todd explains that even if the put expires worthless, you still keep the premium.
Knowing when to collect a premium is somewhat of an art. When you sell a put, you collect a premium. But premiums need to be watched – just as you watch the stock market to know when and what to sell or buy. Todd explains that sometimes you need to pull out the day of expiration with a put, and sometimes you can pull out three days after you buy it. Keeping an eye on the movement of premiums will allow you to collect the cash at the right time.
If you are stuck with a share or ETF, you can sell a covered call. Todd explains that in order to sell the call, you have to own the underline of that share. Watching for when to sell a put or call can help you maximize your share – especially since you can do both with the same share.
Minimizing risk by selling out fast
Selling naked puts and calls isn’t risky when you factor in how long you are holding onto the share or ETF. Todd explained that he only holds onto them for no more than eight days. Extended time is where you run the greatest risks because of global factors influencing the economy and greater volatility in the market. Minimizing your hold on a share to just over a week allows you greater flexibility to get in and out of what works and what doesn’t. The longer you keep a trade, the greater world risk is.
I greatly enjoyed my chat with Todd on the different ways to take advantage of the trading system to earn great cash flow. Just as with anything else, when just beginning, start out small. Maybe try one trade a week. As you learn the system and grow more confident, increase your trade numbers. Be sure to catch the whole conversation for a more in-depth look at how you can diversify your portfolio to keep the cash coming.
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