Disclaimer: I am not a financial advisor, I have no professional training, and nothing in this article should be taken as financial advice. I’m simply sharing what I’ve learned and what has been working for me.
My Journey Into Options Trading
One day last November, I started to feel guilty that I wasn’t using my abundance of free time to do anything worthwhile. I’d always been curious about stock trading, so I decided to finally explore it for myself.
The challenge was figuring out how and what to learn. I don’t absorb much from just reading a book or an article, I learn best by doing, or by seeing real-life examples in action. Stock trading is a loaded subject that tends to be pretty boring IMO. That’s when I decided to look for an online course that matched my learning style.
I specifically wanted a woman-taught course, thinking the approach might resonate better with me. That’s when I found this Options Masterclass on Udemy. It took me a week to get through, spending about an hour a day. I didn’t have much experience doing anything with stocks prior to taking the course. For years, my money sat in retirement accounts managed by professionals. I didn’t really think much about it, I just let the funds do their thing.
Before diving into that, I took the instructor’s shorter free intro course: Why Options Are Better Than Stocks. Her teaching style really clicked with me because she focuses only on what you actually need to know, instead of overwhelming you with every detail.
Once I completed the two courses, I felt like I had a good grasp on how I could sell options to make a profit. However, I was still a bit confused on what tools to use to start making trades. My retirement accounts were setup in Fidelity, so I did a quick YouTube search to see if I could find a simple tutorial. Note that if you’re using Fidelity, you have to be approved to trade options before you can get started. I honestly don’t know what the requirements are, but I filled out a few questions and was approved in a seconds.
I started to test out what I’d learned, making a few small trades a week, until I felt confident that I had a strategy that was consistently working. I started pulling money from the managed funds and began retail trading. In the beginning I was only trading using my retirement accounts, a rollover 401k and a Roth IRA. Eventually I opened a non-retirement account so that I could begin making money that I can actually use now as opposed to after retirement. I won’t share specifics just yet, but I’m generating a lot more money managing things on my own, and so far my account is up 40% year to date. For reference, the S&P 500 is only up 13% YTD.
There’s a lot of variables that come in to play here, and the market has been on an up swing, so I can’t say it’s all because I’m an amazing trader. But I have weathered some fun tariff dips, and I continually improve my strategy to try to avoid future down turns. I’ll keep returning with updates to further verify that the strategy is good long term.
A Quick Overview on Selling Options
So what exactly am I doing? I agree to sell stock I already own if it hits a specific price, or I agree to buy stock if it goes to a specific price, and by doing so I collect a premium that I get paid instantly and keep no matter what happens. It’s a lot like making a limit trade, but getting paid to do so. You can both Buy or Sell options, in my case I almost always sell them. I asked Chat GPT to help me explain:
🟢 Selling a Cash-Secured Put
- You’re saying: “I’ll buy this stock at a certain price if it falls there.”
- You set aside cash in case that happens (that’s the “cash-secured” part).
- While you wait, you get paid a premium (like a rental fee).
- Two outcomes:
- The stock doesn’t drop to your price → you just keep the premium.
- The stock drops and you buy it → you still keep the premium, and now you own the stock at the agreed price.
👉 It’s like getting paid to agree to buy something you already wanted, but only if it goes on sale.
🔵 Selling a Covered Call
- This works once you already own the stock.
- You’re saying: “If the stock goes up to this price, I’ll sell it.”
- While you wait, you get paid a premium again.
- Two outcomes:
- The stock doesn’t hit your sell price → you keep both the stock and the premium.
- The stock does hit your sell price → you sell your stock at that price, and you still keep the premium.
👉 It’s like getting paid to agree to sell something you already own, but only if someone offers you the price you wanted.
📌 Together, selling puts and calls are the “wheel strategy”:
- First, you sell puts to get stock at a discount.
- Then, once you own the stock, you sell calls to get rid of the stock for a profit.
- Rinse and repeat.
- You make money when you sell stocks, and you earn income from premiums, even when you don’t end up buying or selling a stock.
Things to Note
- When you sell option contracts, the asset the option is based on is 100 shares of a stock. Thus you are agreeing to either buy or sell 100 shares of a stock. This was the scary/risky part for me, as I only ever bought a few shares of something at a time. This big risk in selling options, is not the options themselves, but just the fact that you have to own or agree to own 100 shares of something. If the market crashes, you’re screwed either way. If you own individual stocks or managed funds, it’s all going to go down. You then have to be patient in waiting for things to recover, as you only take a loss if you sell while you’re down.
- Which brings me to my next point. Only sell put options for things you want to own long term, because you never know what will happen.
- When you sell an option you pick when the option will expire. I like doing weekly options because I feel there is less risk. You can sell them anytime leading up to the expiration date. I usually sell options on Mondays for expiration on Fridays. You can set expirations for weeks in advance, but this seems risky to me and I haven’t tried it yet. However the more risk, the higher the premium you collect.
- I use Fidelity as my brokerage, but there are lots of other platforms out there, like Robinhood. I believe Robinhood will even let you do option trading simulations, so you can practice without spending any money.
- If you trade in non-retirement accounts you’ll have to pay taxes on both the premiums you earn (these count as income), and on the capital gains from selling stock.
- Make sure you pay attention to important dates like Fed Minutes, Job Reports, Inflation Data, etc. as these can effect the market. Additionally, earnings weeks and ex-dividend dates can add volatility to stocks you may be looking at, so take caution if you’re trading during these times.
Resources That Helped Me
- The first two modules of Predicting Alpha’s Ultimate Guide to Selling Options were super helpful, though after that it started to go over my head.
- Brad Finn’s YouTube channel is another great place to learn. He’s a school teacher in NY, and has a ton of helpful videos on option trading and other trading strategies.
- For stock research, I use Simply Wall St to find companies that look undervalued. I also subscribe to their newsletter, which is super helpful in sharing upcoming dates like Fed Meetings and Jobs Reports.
- I also track what politicians are buying and selling on Capitol Trades—since let’s face it, they often have insight the rest of us don’t.
- And I love following Cathie Wood and ARK Invest. I subscribe to the Advisor Updates and Innovation Insights newsletters. She invests in cutting-edge companies, and honestly, she’s just a badass female trader I look up to.
Final Thoughts
Trading options with the Wheel Strategy has been a fun and surprisingly effective way for me to grow my money. I’m still learning every day, and I’ve definitely made mistakes along the way, but that’s part of the process. If you’re curious, I’d recommend starting with some beginner-friendly resources like the Udemy courses I mentioned and Brad Finn’s YouTube channel. Just remember—do your own research, understand the risks, and never trade money you can’t afford to lose.
Please ask me any questions you might have. I’ve had a lot of friends and family inquire about how to get into trading options, so I thought I’d put this post together so it would be easier for me to share information in the future. I will continue to update as I learn more and improve my own strategies. I hope you find this useful!