This Income Strategy Is a Game Changer

[Archives]( Live]( [Twitter]( [Youtube]( [Instagram]( [Discord]( [Tiktok]( Former CBOE Legend Shares the "Ugly" Trades he's using to make 143% average gains every 10 days...and that's on the Ugliest Mark Sebastian is a legendary market maker with a 10+ year career in the pit of the CBOE, making millions for himself and his clients by using a specific form of arbitrage, where trades only cost $100 but can return up to 9,030%. He unveils his arbitrage secret in a special presentation from Austin, Texas. He’s even going to share two ugly trades he’s putting his own money into. He’ll show you how you can do the same, step-by-step. [Get the details right here]( MAIN STORY This Income Strategy Is a Game Changer By Tom Gentile. Dear reader. There has certainly been a lot of turbulence in our market throughout this year – and it looks like it’ll continue right up to year end. The market fluctuations have taken the S&P 500 down by 25%, with 10% - 15% rallies in between. But despite the turbulence, my Rocket Wealth option selling strategy has produced a win/loss ratio of over 90% this year. And, my strategy has allowed Rocket Wealth subscribers to realize up to 82.5% of the total credits received from selling option premiums so far in 2022. Now, we’re still hearing about the potential for a Santa Claus Rally this month, but it’s also mingled with news about the dreadful recession peaking its head over the horizon. Despite any good or bad news, however, I want to tell you about my income generating strategy that works in bullish, neutral and even bearish market conditions. Let me first tell you the reason my income strategy is so successful, and then I’ll tell you what the strategy is. The Income Strategy That Profits from High Implied Volatility First, let’s talk about two types of volatility – historical volatility and implied volatility. When you look back in time at stock price fluctuations you can get a sense of historical price volatility over time. For example, if a $50 stock moves to a high of $55, or moves to a low of $45, the $10 fluctuation in price indicates a 20% price fluctuation – this is historical volatility, which refers to price fluctuation over time. Another type of volatility, however, is implied volatility (IV), which has more to do with future expectations of price movement, rather than historical movement. Implied Volatility and The Volatility Index Understanding implied volatility will be important to you – it can help you decide if you want to sell options for income or buy options to speculate on price movement. So, let’s dig a little deeper into implied volatility and how it impacts an option’s price. When uncertainty arises about the future of a particular stock, or even the future of an entire economy, traders and investors will buy options to speculate on price movement or to hedge entire investment portfolios. This speculation and hedging can create extra demand for put options, and when demand increases, put option prices can also increase – which can also cause an artificial inflation in option prices. Look at it this way: Bond yields are higher for longer-dated maturities because investors want to be compensated for the uncertainty of the future. Similarly, option prices can be higher as demand increases, due to uncertainty of the future – and traders want to be compensated. Now, there’s a tool you can use to help you determine when option prices are higher (inflated) or not – that tool is the Volatility Index (VIX). In the chart above you can see on the left side, around mid-August, the VIX was at a lower level than it was by the end of September – on the right side of the graph. As you note the high and low levels of implied volatility on the VIX chart above, let me give you a comparison example of how these different levels can impact option prices. On August 8, when the VIX was low, near 20, in the chart above, a 30-day put option could be sold for about $8.50 per contract. By comparison, on September 27, when the VIX was close to 32, 12-points higher, a similar put option could be sold for $11.00 – nearly 30% more inflated. Just by comparing the VIX chart to itself over time, you can more easily recognize times when option prices are higher (inflated) or lower – simply look at the range over time, and compare the current VIX reading to its past high and low areas. Selling Puts for Income Now, for the Rocket Wealth Trading strategy I mentioned above. It almost goes without saying that I’d rather sell a put contract for $11 per share than I would for $8.50 per share – I like it when I can get more income out of similar trades. If you’re wondering how you might go about finding individual stocks that have high (inflated) put option prices… well, that’s where my proprietary software comes in handy. The chart below is from a daily update on my Toms Option Tools App (Search in your App Store for a free download). Each trading day you’ll be able to pull my Top Ten list of Expensive Implied Volatility, and each of the stocks on the list will show you the high, low and the current implied volatility levels. The options on this list are not necessarily considered high priced, but rather “inflated” option prices. It’s kind of like finding those $11 option prices vs the $8.50 prices I discussed earlier. Now for the strategy The strategy is quite simple – it involves selling put option contracts. Put option buyers are given a right to sell shares to another person; and, therefore, the person on the other side of that contract, the put seller, is given an obligation to buy shares of stock at a specific date and for a specific amount. Essentially, as a put seller, I immediately receive a credit for selling a put option; then, depending on how the trade works out, I’ll earn and keep the credit I received, and then I may be able to buy the stock – which I can either sell or keep as an investment. So, as I mentioned earlier, I sell put contracts as an income generating strategy, and will occasionally buy the stock. So far this year, my subscribers have been able to keep up to 82.5% of the credits taken in from selling puts while picking up some shares on occasion. To learn more, be sure to [join my discussions]( about this and other strategies each Monday through Wednesday. [I’ll Live at 12:00 noon ET.]( I’ll see you there, Tom Gentile America's #1 Pattern Trader Join Tom each Monday through Wednesday at 12:00 p.m. ET as he discusses a range of strategies to make money in a strained market environment. Did you miss the Live session? Watch Tom’s replays!   FEATURED ARTICLES [The Rally Won't Last - Here's What to do.]( [Five Indications the Market has NOT Bottomed]( [This Bear Market Rally Could Prompt a 2001-style Crash](   GET STARTED [Options 101: The Easiest Options Guide You’ll Ever Read]( With anything and everything you’ll ever need to know about trading options, this is the best guide to making money in the markets you can get. [Straddles – How to profit up or down!]( Is there a way to trade options regardless of market direction? The answer is YES! Straddle trading takes the guess work out. Straddles can profit if the stock’s price rises OR falls on speculation. [Earnings: The IV Crush]( Trading options is a zero-sum game, meaning there will always be a winner and a loser on either side of a trade. Trading through an earnings report and losing in spite of the fact that the underlying stock price went in your intended direction can feel like getting stung by the biggest bee in the hive – Ouch! There is a right way to trade earnings. [The All-in-One Chart]( Welcome to my guide on the All-in-One Chart. The charting tools are made available for you to utilize in Tom’s Option’s Tools. My All-in-One Chart is made up of several components to help evaluate charts. Although there are many other factors involved in decisions regarding trades, chart analysis is a part of the process. [How to set up a Microcurrency Account]( Currencies make up the biggest market in the world today. In fact, every single day, up to $6.6 trillion is traded in the currency market. But there’s something extraordinary happening in this massive global market… It’s all hidden in a tiny offshoot that’s helping regular, everyday Americans become rich in the blink of an eye. They’re called microcurrencies – and it’s your turn to take advantage of these major moneymakers by setting up your own Microcurrency trading account.   CASH COURSE For the first time ever, I’m letting a small amount of new readers get 100% free access to my Cash Course. This cornerstone course will show you – in just seven simple steps — everything you need to know about trading options. Plus, you’ll learn how to make the perfect trades using the same methods I’ve used to train over 300,000 readers. So get ready – I’m about to show you how to cash in on any market – whether it’s up, down, or sideways. 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