When selling options settings goals is critical. In the video below I discuss my goals for 2023. I set monthly income goals for selling options as well as earning dividends.
When I started my journey over two years ago, I started with a very modest goal of earning $1,000 in premiums monthly. This way I was able to start slow and really learn about options. Also, I was not competing against anyone but myself. I quickly learned that I could achieve this goal. I later increased it to $1,500 and then $2,000 monthly.
During this time I really took the time to learn the terminology and nuances of trading. This also included the Greeks and how they work. Here is a good link if you want to learn more about the Greeks. I also started with only 1 contract when selling puts. I later increased to 2 contracts and in some cases for inexpensive stocks went to 3.
I also decided on some guidelines when selling calls and puts. For both, I originally started by trying to use a 20 Delta. This worked great for all of 2021. However, I started to get into some trouble with some of the puts that I sold. I realized that I was taking too many risks and backed down to a 15 delta for cash-secured puts or vertical put credit spreads.
This lowering of risk for puts had a dramatic impact on my trades. I had fewer issues with any positions where I used a fifteen delta. Even today almost all my put assignments were the original 20 delta trades. However, some of this success may be related to picking better stocks and ETFs.
I have always been an income value trader. I love dividends and investing in good companies. I use my options trading to supplement this trading philosophy and not the other way around. I want to buy good companies at great prices and earn good dividends in the process. This Is still my plan and why I believe selling options has worked so well for me.
Now onto my goals for this year. My goal for monthly premium selling options is four thousand a month. I actually asked my viewers, and they encouraged me to go with this higher goal. Originally, I was going to go for thirty-five hundred monthly. Please keep in mind that this is an end-of-year goal. Meaning by the end of 2023 I want to be earning this amount of money.
Now in addition to the monthly premium I also want to increase my monthly dividends by about 12% and be earning two thousand monthly in dividends. Like option premium, this is an end-of-the-year goal. Dividends are truly passive income. If you want to learn a bit more about my philosophy with dividends take a look at this blog post.
So in total, I want to be earning about six thousand dollars monthly by the end of 2023. This is more than I need to live on a monthly basis. My monthly budget to live is around $4,600 monthly. Meaning even today I can live off of my options and dividend income. Do I plan to retire? No, but this has bought me the ability to be financially independent and do what I want.
I am no expert with this stuff, and you can also do this. I encourage you to set realistic goals and start slow. It takes time to learn how to sell options but in my mind, it is one of the greatest things you can learn. It is not a get-rich-quick scheme. It takes time and patience to learn to sell options. The idiom that pigs get fat, and hogs get slaughtered is very true.
Thanks for taking the time to read my blog. If you have any questions please do not hesitate to reach out.
Uncle Jim
