How I Generate Income For My Family Using 112 Options
Have you ever wondered how to consistently generate income through options trading? Today, I’m excited to share with you one of my favorite trading strategies: the 112 options. This strategy has been a game-changer for me, allowing me to consistently generate monthly income for my family.
What is the 112 Trade?
The 112 trade is a powerful options trading strategy that involves selling two put options while simultaneously creating a put debit spread. The goal of this trade is to generate income by collecting premiums from selling puts, while also providing downside protection through the put debit spread.
How Does It Work?
The basis of the 112 trade is simple: we sell two put options with a low delta (around 7) to collect premiums. This means that as long as the market stays above our chosen strike price, we profit. Additionally, we create a put debit spread with a slightly higher delta to provide some downside protection. This helps mitigate losses if the market moves against us.
Three Ways to Hedge the 112 Trade:
- Default Put Debit Spread Hedge: This involves closing one of the short puts and leaving the put debit spread intact. While this provides a basic hedge, it may not be sufficient during periods of high market volatility.
- Triangle Hedge: By closing one of the short puts and the corresponding leg of the put debit spread, we create a wider hedge that offers more protection during market downturns.
- Fat Bastard Hedge: This advanced strategy involves closing both short puts and converting the remaining put debit spread into a wide, high-profit hedge. This provides maximum protection during significant market crashes.
Generate Income Using 112 Options
The 112 trade is a versatile options strategy that can help you generate consistent income while managing risk effectively. By selling puts and creating put debit spreads, you can profit in various market conditions while limiting potential losses.
Additionally, utilizing different hedging techniques allows you to adapt to changing market dynamics and protect your capital.
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Thanks for reading 🙂
Austin Bouley
CEO & Chief Strategy Officer
