Learn to Trade Options – Trades I Made

August is coming to a close, and in an effort to help people learn to trade the stock market, I figure I’ll post the trades that I made in my Tastyworks account. Tastyworks is the best place for stock trading beginners to open an account because they require no minimum deposit, have the lowest fees, and just registering and account gets you free access to all of their free educational content. If you haven’t done so yet, I strongly suggest you at least register by ==>CLICKING HERE.

So this month I traded stock options in SPY, IYR, SODA, IWM, AMZN, CRM, FAS, and SQ.

SPY – SPDR S&P 500 ETF

learn to trade options

On August 16th I sold an IRON CONDOR in SPY. At the time, I felt that SPY might be due for a bit of a pop, so I sold a 281 / 286 PUT, 296 / 301 CALL IRON CONDOR for SEPTEMBER 2018 expiration. I collected $190. On 8/30, I bought it back for $117.

how to trade options in spy

I’m not going to factor in the broker fees, because every broker is different, It is definitely something that every stock trader should factor in, but for educational purposes, I’m not going to add in all that extra math. But I should mention, the nice thing about Tastyworks is that this only cost me $4 in fees to open, and zero to close.



IYR – iShares US Real Estate ETF

how to trade options in iyr

I had two different trades on IYR in August, both were profitable. On August 17th 2018, I felt that IYR was going to move to upside and I wanted to sell a PUT SPREAD and use the money to buy a CALL SPREAD, so I bought the 81 / 83 CALL spread, and at the same time sold a 79 / 83 PUT spread. I like to think I am financing the call spread by selling the vertical spread. Not including brokerage fees (Tastyworks was only $4 to open this trade) I paid $42.

My assumption was correct, and only 3 days later, I more than doubled my money. I thought the run was done, and exited this position for $91.

 

how to trade options in iyr

The second trade I did, I opened the same day I exited the previous position. This time I thought IYR was going to pullback, so I did the opposite of the previous trade. I sold a call spread, and used the money to buy a put spread. I sold the 83.5 / 85.5 CALL SPREAD, and bought the 83 / 84.5 PUT SPREAD. I paid $22, not including brokerage fees.

As you can see, four days later I made about 400%, and sold my position for $82.

how to trade options in iyr



SODA – SodaStream International Ltd.

how to trade optoinsThis is one of those golden opportunities that comes along every so often. Pepsi made an announcement that they were going to by Sodastream for 3.2 Billion dollars, paying $144 for all the shares. I decided to see if I could sell a vertical spread, but I figured it would be impossible, now that the news is already out.

Boy was I glad I checked, I was able to sell not one, but 2 different out of the money spreads in SODA. This first one was the 145 / 150 CALL spread for October 2018 expiration. Not including fees (only $2 with Tastyworks) , I sold it for $74. I bought it back 4 days later for $25. I could have just let it expire, but I wanted to free up the margin, to be honest.

how to trade stock optoins

The second spread I sold in SODA was the same day as the first. I guess people were getting wise, so I had to go all the way out to January 2020. Still, seemed like free money, so I sold it for $80. Last I checked, I would have to pay $30 bucks to exit, and I think I will wait a few more days.

Since Pepsi already said they are buying all the shares at $144, I am confident that the price won’t go ITM. If for some reason, Pepsi or another buyer decides to up the price, it could happen though. It seems like a done deal to me though, so I can risk a few more weeks.



IWM – iShares Russell 2000 ETF

how to trade optoins in iwmIWM is iShares Russell 2000 ETF, and is one I regularly trade. It is very liquid, and liquid is good. On August 21st I thought IWM was going up, so I sold a PUT SPREAD, to finance a CALL SPREAD. I sold the 169.5 / 171 put spread, and bought the same 169.5 / 171 CALL spread. I paid $33.

On August 27th, I sold the position for $57. Not bad, I would do that all day.

That same day, I sold an IRON CONDOR, which in case you haven’t heard of before, is just selling a put and call spread together. The idea is that the underlying will stay between the short strikes. I sold the 161 / 164 PUT SPREAD, and sold the 174 / 177 CALL SPREAD both for September expiration. I sold this for $87.

If IWM stays above $164, and below $174 I get to keep all of that premium. To be honest, I will buy the position back for $40 if I can, I will keep you updated.

how to trade optoins in IWM



AMZN – Amazon Inc

is amzn stock a buy

It seems crazy to think how much money that could have been made just buying AMZN a decade ago. Oh well, there is still more meat on this bone.

I made more trades in Amazon than any other underlying last month. Luckily, they were all profitable. The first one was on August 21. I sold a 1875 / 1880 put spread for September 2018 expiration, and collecting $219, before fees. On August 29th, I exited that position buying it back for just $73.

On August 28th, I sold the October 1875 / 1880 put spread, collecting $158. I closed that one the next day, buying it back for $120.

I also sold an IRON CONDOR in Amazon on August 29th, I sold the 1690 / 1700 PUTS spread and the 2100 / 2110 CALL spread for September 2018 expiration and collected $132. Overnight, I got nervous, and bought it back the very next day, but for $124, so I still made money.

how to trade options in amzn

I opened another position in AMZN on August 30th. I don’t like to open positions near the end of the month typically, but it with AMZN reaching new all time highs every day, I guess I have FOMO. I moved up the strikes a bit, and sold the 1970 / 1975 PUT SPREAD for October 2018 expiration. I collected $203. So far, I still have it open.

amazon at all time high



CRM – salesforce.com inc

salesforce.com crm earnings

Salesforce.com ticker CRM was reporting earnings and I wanted to use the volatility to my advantage. They were going to report earnings on August 29th, after market close. So just before closing I sold an IRON FLY, which is just an iron condor where the short put and call strikes are the same.

I sold the150 / 155 PUT spread and the 155 / 160 CALL spread. I collected $408. The idea is that the next day, both the puts and the calls will be worth less, since some of the fear will be gone. You don’t usually get a lot out of these plays, but still, it keeps you engaged in what the stock market is doing.

I bought the position back the next day for $388. I like it.

crm salesforce



FAS – Direxion Daily Financial Bull 3X ETF

how to trade optoins in etf fas

Another trade I made was a short outlook on FAS. I sold a call spread for October expiration. I sold the 78 Calls, and bought the 81 calls.

how to trade etf fas



SQ – Square Inc.

how to trade options in sq

And lastly, I went short SQ, which seems way too overbought to me. I sold the 90 / 100 call spread for September 2018 expiration. I collected $231, and am hoping to use any pullback and time decay to my advantage.

how to trade options in sq

Well, that’s all I have for now. If you have any questions or concerns, I’d love to hear from you. Please leave a comment below. Thanks.

James

I live in Pittsburgh PA with my family. I am 50% WWE Wrestlemaniac, 50% Walt Disney World nut.

4 thoughts on “Learn to Trade Options – Trades I Made

  • August 31, 2018 at 8:55 pm
    Permalink

    Hi James,
    I’m an absolute beginner at this but I’m wanting to learn about it, hence why I found your page. I had a small go at trading at possibly the worst time in the history of trading – 2008. I wasn’t to know that GFC would happen and my stock would be slashed in half! So needless to say it put me off for a long time but I’m now interested in learning the basics and perhaps dabbling again.
    Can I ask James, is this something you do on the side, or is this something that you make a living from? How much time do you spend on this?
    Thanks for sharing your learnings here and I look forward to checking back in here often.

    Reply
    • September 5, 2018 at 3:30 pm
      Permalink

      Hi Melissa,
      Thank you for visiting TopJunkies. I work full time, but my wife has been able to quit her job and stay home with our kid thanks to the income that trading stock options has provided my family. Also, since then I have been able to save over 30k in a 529 account for my childs college (shes 10 now) over 280k in retirement accounts. I will pay off my home in a few months, pay cash for cars, and have been fortunate enough to take 2 vacations every year.

      I don’t spend more than 1 hour a day if that, looking at the stock market.

      Reply
  • September 1, 2018 at 3:37 am
    Permalink

    Simply amazing stuff James and I’m super glad you found trading to work for you. I had never been successful at trading, but after watching a few of the videos at Tastyworks, I am starting to get a better understanding how the stock market works. I can see how one could make a lot of money out of selling options. I’m hoping for a consistent flow of income from selling iron condors and spreads.

    Reply

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