11-09-2021, 06:12 PM
(11-07-2021, 05:03 PM)fenders53 Wrote:I understand; options are a whole different animal. I tried to learn about it, and still don't get the gist of it, hence why I stay away from it. Thanks for your feedback. I tend to prefer being bullish as well, but I do eventually plan on adding short trading to my skillset (assuming I get comfortable with bullish first). I'll certainly keep this in mind.(11-07-2021, 04:25 PM)Navi Wrote: For those who have answered so far, I have the following questions:I do some short term trading but I don't depend on it for additional income or return.
1) For those who use short term trading to provide income to their dividend portfolio, what style of trading do you use?
2) For the options traders, does that provide enough income for you in terms of supplementation? What is your preferred style of options trading?
In a sideways or up market I sell options successfully. It's tougher in a down market as I am generally bullish. Over the course of a year I can usually triple my monthly dividend income or more selling options. Sometimes much more and almost never less than my dividend total. I am late in my accumulation phase and have the advantage of a lot of capital to commit as collateral. I never trade anything naked. It ties up a lot of cash but it would be sitting there collecting nothing otherwise as I am near retirement and maintain a decent sized liquid position just in case. My methods are simple sales of cash covered puts or calls. It can be done with credit spreads with far less capital. I do that occasionally. There is a learning curve but some simply trades are possible.
What I don't do is buy calls or puts for a few hundred dollars or less. I am on the other side of those trades. You can make money buying options but most people don't. About 70% of them expire worthless and that is why I sell them. Way too much to explain in a paragraph.