Options Trade #1 - CVS Short Put

Updated: Dec 6, 2018



I'm very excited today to get the ball rolling on our new VTS Discretionary Strategy.  Remember this is purely optional and it's just my attempt to give back to the community and teach you some of my go-to investing strategies completely free.

I just released a video giving a little explanation to the first trade we will be taking.  It's called the Wheel of Fun and you'll hear me refer to this trade quite a bit in the coming months / years.  It's one of my favorites and I'm pleased to teach it to all of you.



As I explained in that video, the basic Wheel of Fun trade can be done with either puts or calls to get things started.  Since right now the overall trend in the markets is up, we'll begin with puts.

* Remember, since this is a totally new strategy for most or perhaps even all of you, it would be best to execute in a practice paper account.  But if you are planning on doing it live, start small.  Consider just doing 1 single option contract.  Remember there's no urgency here.



Step 1)  Selling a cash secured put

-  The underlying stock for our first trade is CVS Health Corporation  (CVS)

-  We will sell a cash secured 67.50 PUT for April 2018.

-  1 option contract requires 6,750$ in capital to be "cash secured"

-  Get the best price you can  (Since we're selling for a credit, the higher the price the better)

-  As I'm currently looking at it, it's trading around 2.00$ but it's been as high as 2.20$ and as low as 1.80$ so just do your best.  Higher the better.

Steps 2, 3, and 4 we will save for next month.  Right now we just sell the cash secured put and wait for the April expiration.  We will be using a 10% stop-loss though so if the trade crosses that threshold we will sell it for a loss and move on to a new target.

Don't worry if you don't get it executed today.  These Wheel of Fun trades are often times available for several days after the initial signal so do your best.  If you can sell the put great.  If not, email me with your questions, I'll help you out, and you can try again tomorrow.


Want to join the awesome VTS community?

* All information, analysis, and articles on this site are provided for informational purposes only. Nothing herein should be interested as personalized investment advice as I make no recommendations to buy, sell, or hold any securities or positions. I'm making this website available "as is" with no warranty or guarantees of it's accuracy, completeness, or current's. If you rely on this website or any of the information contained, you do so entirely at your own risk. I do not hold myself out as a financial advisor and nothing herein is a solicitation for any fund or securities mentioned. Although I may answer general questions about the information herein, I'm not licensed or registered under security laws to address your personal investment situation. Past performance is not indicative of future results. Any and all financial decisions are the sole responsibility of you the individual.