Recently, I got a lot of people asking me if it is possible to achieve financial freedom through options trading alone. It seems like financial freedom is not only becoming the new American Dream, it is fast becoming the new dream for people around the world. As an options mentor and financial expert, I am reluctant to give a positive reply to such a question due to the fact that I always advocate diversification and creation of residual income as a means to financial freedom.
However, I did give some thought to the question of options trading for financial freedom and I realized that it is indeed possible to attain financial freedom through options trading alone IF (and that is a BIG if) you are at least an extremely experienced and knowledgeable options trader.
First of all, financial freedom takes a strong source of residual income. How does one produce a source of residual income sufficient for financial freedom? You do that through producing reliable, consistent monthly income without having to work for it. So, how does trading options help you achieve that?
In order to release residual income strong enough for financial freedom, you first need a sizable fund which most beginners or people who simply want financial freedom doesn’t have for a start. This is where the leverage of trading options comes in. Through leveraged swing trading using a small fund, options trading give anyone with only a small amount of money a shot at building a big fund quickly. This will take a proven options swing trading system, consistent and disciplined trading as well as good technical analysis skills. You will need to be able to consistently and accurately determine the outlook on a stock or asset and then be able to choose an options strategy that is best designed to optimize the return on investment on such a move. When done properly, it is possible to quickly multiply a small fund into something sizable. And yes, it is not going to be easy, especially for the beginner, to get such analysis and choice of options strategy right all the time, every time. As such, building a sizable fund through options trading does require good options education and guidance.
Once such a sizable fund is achieved, this is when you can release residual income from your fund for monthly income using options strategies such as the “Covered Call” where you simply sell out of the money call options on a stable stock you buy using the money you made from the previous aggressive trading phase. The income received from the sale becomes sizable enough for financial freedom if you have a big enough fund size. For instance, KO shares are selling at $60 now with its near month $61 strike price call options trading at $0.40. If you could buy 10,000 shares of KO for $600,000 and then sell 100 contracts of its $61 strike price call options, you would make a total of $4000 for that month without doing anything extra! If KO remains below $61 by expiration, you simply keep the $4000 and then sell some more call options next month! If KO rallies above $61 and becomes assigned, you not only make that same $4000, you get extra profit on KO rallying from $60 to $61! Then you simply buy some more KO shares and then do the same month after month for residual income.
See how easy it is to achieve financial freedom through options trading if you have a sizable fund which the leverage of options trading allows you to build?
Yes, it is possible to achieve financial freedom through options trading but it is going to take skill, knowledge and some luck to achieve the initial fund size. But, if you already have $600,000 and can live off $4000 a month anywhere in the world, then hey, what are you waiting for? Financial freedom through options trading is awaiting you!