Trading stock options is one of the things that has long been in the “mystery to me” category. I understand the basics of partly owning a company through stocks, but options are a whole different ball game. Christopher Uhl is a successful stock options trader I met through Twitter and we’ve had some great interactions there. I consider him to be a very knowledgeable and well-informed person when it comes to the issue of trading stock options so I asked him to come on the show to explain his “10 minute” method.
Video Version of the Podcast
Outline of This Episode
- [1:57] A rundown of how Christopher got into options trading
- [5:10] The easiest and best ways to get involved in trading options: The Covered Call
- [6:05] Details regarding how covered calls work
- [7:43] What does it actually mean to sell a “call” on shares you own?
- [9:19] Turning your stock holdings into a cash flow generator through options
- [10:18] How you can know the likelihood of whether a call is going to expire up or down
- [12:20] The type of return that could be expected from trading options on 100 shares
- [14:39] Another simple and successful approach for those who don’t own shares
- [16:57] The proper education can save you from too much risk
- [21:08] Neutral trades: when you don’t want the stock to go up or down
Connect with Christopher Uhl
- Get Christopher’s FREE Trading Courses
- The How To Trade Stocks And Options Podcast
- Chris on Twitter: @10MinuteTrading
- Chris on Instagram:@10MinuteTrading
Chris learned the hard way when he started trading stock options
In 2009 Chris first came upon the idea of stock options trading via an IRA portfolio available through is work. He had the opportunity to use his IRA to purchase stock options, so he began dabbling. At the time he was purchasing what are called “leveraged ETFs.” He wasn’t making much money over time, was losing sleep because of the risks he was taking. He decided to put the idea of trading options on the back burner for a while.
When he went back to it he realized how profitable buying puts and calls was for some people. He decided to educate himself. I’m very grateful he did. Now he’s educating many people about how to wisely trade stock options and I hope you’ll find a beneficial new way to generate cash flow for your family on this episode.
Beware of the unnamed, “successful” traders you see out there
Many people talk about the success they are having trading stock options but much of the time the person posts under an anonymous Twitter profile. You have no way of knowing who they are and have no way to verify their story. Are you willing to put your hard-earned money at risk based on the advice of a person like that?
Christopher says those people sell the dream of stock options trading but don’t have the proof needed to truly help people. He’d rather talk about the reality of trading – the good, the bad, and the ugly. In this conversation, Chris shares his own failure moments in options trading and explains why they happened and how to avoid them.
A good, strong return of 20% to 30% per year is possible trading stock options
Christopher has experienced a lot of success trading stock options over the last 9 years. Once he got his bearings and better understood what he was doing, he was able to start turning a profit using “Puts” and “Calls” – two methods of trading options.
Puts gain in value as stock prices go down (bearish) and Calls gain in value as stock prices go up (bullish). As you can see, trading stock options provide a way for you to make money coming and going, so to speak, rather than depending only on stock prices rising as in traditional stock trading.
Christopher says that a 20% to 30% return over the course of a year is possible trading options, but you have to take the time to educate yourself so that you are able to make informed decisions. Listen to this episode to hear him explain the basics of stock options trading – and to learn if this option for creating ongoing cash flow is right for you.
Paper trading platforms can help you learn how to trade without risk
When Christopher first started trading stock options he was stressed and losing sleep. He wasn’t sure if he could learn any other way. But his wife had the idea that he could “pretend” to trade using fake money. That’s exactly what he did. It’s called “paper trading” and is a great way to learn how to follow the markets, how to understand the terminology involved, and to see the principles behind stock options trading at work. There are many paper trading platforms that you can use to educate yourself.
But be patient. Take the time required to learn. There’s no rush to get into stock options trading because it’s not going away. When you invest the necessary time to educate yourself, you’ll be way ahead once you do start trading. Listen to find out how Christopher advises you to get started, how you can use probabilities to generate profitable returns, and how to access his free options trading courses.
Connect With Casey
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