How One Trade Can Be Used Multiple Times for Layered Income

I post my personal trades for income in my newsletter on selling commodity options, Time Farming Training Bulletin.

On September 29, 2017, I sold the 1500-strike DEC17 Gold CALL for $40 per option.
On October 17, 2017, I sold the 1500-strike JAN18 Gold CALL  for $80 per option.
On November 27, I sold the 1500-strike MAR18 Gold CALL for $100 per option.
On December 07, 2017, I sold the 1100-strike MAR18 Gold PUT for $70 per option.

Selling just two of each of these options gained me a total credit in my account (not incl.commission cost) of $580.  These options have expired worthless or are about to expire worthless, which means I keep the credited amount.

When an option expires worthless, I don’t do anything.  When you sell options, you get a credit in your account; if the  option expires worthless, you do nothing and your broker removes the position from your account.  It’s gone.  It doesn’t exist anymore. But the money you received for selling it, is still in your account.

It’s almost like you have a license to sell lotto tickets.  It’s your chance to be the casino and not the gambler.

On the days I placed these trades, my ThinkOrSwim software (it’s free) told me the “Prob OTM” of each of the options.  They were:

You get ‘casino odds’ of winning.

DEC17 1500 CALL: 98.86%
OCT17 1500 CALL: 98.05%
NOV17 1500 CALL: 97.37%
MAR18 1100 PUT:  97.23%

“Prob OTM” means the probability the option will expire worthless because it is Out-Of-The-Money (OTM) on the expiration date.


What made me choose these options to SELL (short)?

I examined the price chart for the underlying Gold futures contracts.
I studied a 15-year price history of each of those contracts.
I noted the HIGH and LOW in recent trading years and contracts.
I know from research that historically, when the DOW is UP, gold is neutral to down (meaning with interest rates low and the stock market making higher HIGH’s, that the odds of gold falling or rising in any extreme measure is unlikely.)

The point to be made here is that the income from these expiring options has been coming in for several months – all basically, off only one trading idea. 

The parameters that move gold prices haven’t changed much at all over months of time, so it is possible to make income by doing multiple trades off of one market opinion.  I’ve done the same over these months with Natural Gas and Grain prices, both which have strong historical seasonal price patterns during this time.

Where Preparation Meets Opportunity


Subscribers of TIME FARMING TRAINING BULLETIN receive my trading notes, charts, fundamental analysis, and seasonal price trend information on every trade I place.  They also get commentary and articles to help them become better traders.

The concept of selling far OTM options has been used by professional traders for years.  Now the software like “ThinkOrSwim” and others (free to customers) makes getting the right information very easy, so long as you understand the basic idea/concept

If you are interested in regular income and have some options experience (or you are willing to learn), sign up for the 60-day free trial to learn selling commodity options  TIME FARMING TRAINING BULLETIN HERE.  I have a new book that explains the concept for under $20 at Amazon with free Prime shipping HERE.  Thank you. – Don A. Singletary  This is the method that levels the playing field between professional investors and the small/medium personal investor.

The commentary and examples are for teaching purposes only and are not intended to be a trading or trade advisory service. Any investments, trades, and/or speculations made in light of  the ideas, opinions, and/or forecasts, expressed or implied herein on the web site and/or newsletter, are committed at your own risk, financial or otherwise. Trading with leverage could lead to greater loss than your initial deposit. Trade at your own risk.   Investors and traders are responsible for their own investment/trading decisions including entries, exits, position, sizing and  use of stops or lack thereof.  This is not a trade advisory service and is for educational purposes only.

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