EP# 269: MoneyPress Method: The Overlooked Options Strategy For Weekly Paychecks Without The Risk

We're going to learn simply how anyone can create a weekly income stream, we call them weekly paychecks, how they can start with a small account and really do this with as little as a couple thousand dollars. If that's all you have, if you have more, that's more advantageous. And while being able to sleep at.

Night, you don't need a ton of money. That's what we love about it. And some people, maybe you've got your million dollars with your financial planner and you got a little $50,000 account you want to have some fun with. This is a great way to start investing for yourself, learning a new skill, learning to generate some new income, keeping your mind sharp in retirement. There's just a bunch of different reasons why people come to Trader's Edge to learn this stuff.

And welcome back to the show. Thank you for tuning in. This is Brad Costanzo. And today we're going to talk about making money. Now, my audience, you love to make money. Sometimes that's through your own business and sometimes that's through investing. We've covered a lot of different strategies to make money, whether that is building a business, buying a business, selling a business, investing in alternative assets, even bitcoin and crypto. One of my favorite topics, one of the things we have not covered very many times, however, is stocks, options, traditional investment strategies that are available to absolutely everybody out there. And, and today I have got two amazing guests with me. I've got Preston the Pirate James and his right hand man, Mike Curtis from Trader's Edge. Today we're going to talk, though, not just about trading stocks, especially not penny stocks. We're going to talk about something that I stumbled across maybe a decade ago. I want to say it was about 2013. I just moved out to San Diego where I live now. And I had heard about this concept called a money press method of investing in stock options. And I didn't pay it much attention, but I had heard the rumblings about it went back to making money in my own business and investing in traditional investments, like stocks, et cetera, real estate. And 10 years later, here it is, 2023. I start hearing some other friends talking about this money press method and what it is. And I finally I bit and I had them tell me a little bit about it. I went and researched it. I really liked what I was starting to see. And one of the things that I love to do on the show is invite the people who are doing really cool things on so that I can methodically pick their brain and find out if it really is as good as they say. So that is why I have Preston James and Mike Curtis from Trader's Edge. Gentlemen, welcome to the show today.

Thanks a lot, Brad. Good to be here.

Yeah, me too. And I'm excited to hear about about this. Now, I will say that for everybody's background, like my background, I was a financial advisor for Prudential securities early on in my career. I did this probably for about five, 10 years. A lot of the things I know we're going to talk today about is options and a way to use options as an investment strategy. And I'll admit that when I was a financial advisor, I don't think I ever touched an option. I knew what they were and I was fascinated by them. But they always seemed really complex to me at this was a long time ago till I realized that they're not nearly as complex but options. For anybody who's not really familiar with this, I'll just preface before we jump into your methods in the interview. They scare a lot of people. They scared me. But they're really the ultimate form of leveraging and hedging. And often they scare people more than buying and selling individual stocks, but they really shouldn't because if you do them right, you can actually have a lot more income with a lot less risk. And that's one of the things they're designed to do. But if you've never traded options before and this is brand new to you, I encourage you to stick around and listen because from what little I know about this method, it's a very simple method that somebody brand new can start with. And if you do have a lot of options trading experience, you may want to pay attention to because I have a feeling that you're going to learn a couple of nuances that might make a big difference in your portfolio. So, gentlemen, I want to turn it back over to you Traders Edge is a training and trading company that helps people make money. But tell me a little bit more about before we dive into your backstory about what we're going to cover specifically today and what is in it for.

The viewers, we're going to learn simply how anyone can create a weekly income stream, we call them weekly paychecks, how they can start with a small account and really do this with as little as a couple thousand dollars. If that's all you have, if you have more, that's more advantageous. And while being able to sleep at night. Yes. In the volatile world that we find ourselves in, full of wars and inflation and political strife and Every kind of other news that creates volatility, and that sounds too good to be true, but that's what we're going to hit on.

All right, fantastic. And I want to dive into how, but I want to. Before we do that, I want to let you know, and I want to let my audience know that I am a bit skeptical of any investor trader who says they have a way to outperform the market or in other sophisticated investors. I've seen a lot of BS in my life, and I'm not saying that yours is. But if I see something that doesn't make sense, something that sounds too good to be true, I'm gonna. I'm gonna bring it up and hopefully you're gonna explain it to me and the audience, because the last thing I want to people to think is that we're talking about something that's impossible. And at the same time, I think I should put a disclaimer that none of us are giving financial advice on this. On this interview, Preston and Mike, you mentioned that this uses options, right? So this is option trading. And a lot of people out there have never really played with options or it scares them and they think it's really risky. They've heard some stories before we dive into the way this works, let's dive into what are options, how do they work at a fundamental level? Just so that we've level set.

You want to take some of that, Mike?

Yeah, sure. And just to add on to what Preston said initially, most people hear options or they think of Wall street and they just feel intimidated. And our whole goal has been to try to simplify it, try to help someone that has no background in the financial markets just to come and learn a new skill that can generate some income for them. But yeah, options are a derivative that trade off of any stock, right? Apple, Tesla, Walmart, they all have shares of stock that trade on the open market. And then underneath those actual shares are an entire options market that we can come in and trade. And they get a bad rap. People like, oh, options are really risky. And if you're just buying an option and sitting back, it can be risky. But like you said, Brad, from the beginning, if you know what you're doing, it's the ultimate tool for income hedging leverage. So that's what we've really tried to enlighten people on, is that, hey, if you know what you're doing with these option contracts, y trade off of these stocks, the shares of stocks themselves, you can generate income, you can have some fun leverage, you can use it to hedge other positions. You can really use options to just maximize your investment portfolio.

I. I'll add to that. That's very well said, Mike. And I'll add to that, too, that when you get these options in place, some people get just go their personality. They see the action in the market and every little tick and change, and they feel like they have to be glued to your screen. And some people get a second screen and a third screen. And we have with the money press on a weekly rhythm where, yeah, you can open your laptop and take a look, but you do not have to be glued to your screen because everything has already been fixed and income's been created and the worst possible scenario is already set up. I'm getting a little more in the weeds on it, but you don't have to be glued. Islands love this because they have portfolios, they make a lot of money and they, they want to be in the market, but they're just always pulled because you can't do it when you're flying over from Atlanta to Tokyo. And that's your route anyway.

Okay. So as I understand, we're going to learn how to make weekly income with limited downside risk because we've got protection and we're going to be able to do this without being glued to a computer. I think. Did you say something like an hour a week or something of that nature?

Even less.

Even less.

Once you learn the system and you're rolling with it, and that doesn't take too long either, most people can get really up to speed and hitting the ground running within two, three weeks is what we've found. They dive in and just spend a few hours a week studying. And then at that point, you're cruising. And we know most people have jobs or even if they're retired, they don't want to be glued to a screen. So we, we don't want that either. We don't want to have to sit and stare at a computer screen for hours.

Another job, right?

Yeah. So we've built this whole trading approach around that fact that we don't want to be glued to the screen either. And we know most people, whether they're still working or retired, whatever the case may be, they're wanting to plug in, control their own investments. They care about their money more than anyone else. And then they can do this along with whatever else they have going on in their lives.

So. Perfect. Okay, So I want to take it back to fundamentals before we get into the mechanics of how this works and how you're able to provide this. I'll take a moment to explain to my listeners what an option is. If you're, if you've heard the term option but you don't know what it is, there's, there's two types of options, but four ways to use them, right? There's a call option and a put option. And an option is simply, it's a contract. It allows you, it gives you the option to buy it, buy or sell a stock, but you don't necessarily have the obligation to do. And there's a call option is typically if the, if you believe that the stock IBM, you believe it's going to go up, you can, and it's trading at $100 a share. I don't even know what IBM's trading at. But if I can buy an option that lets me buy 100 shares worth of IBM at today's price or at any price and I've got, let's say three months, six months to exercise that option. So if I think that the price of IBM is going to go to 150, but I don't necessarily want to buy that stock right now, which can go down and I can lose money, I can pay a fraction of what it would cost to buy that, which is called the option price or premium to have the right to buy it at let's say 100 or 105. And then if that stock, if I'm right and the stock goes up to 150, I can either then buy the stock and sell it or I can just sell the option. I got that correct, right. That's a very basic like call option. I think a lot of people are familiar with that. If you think it's going to go up, buy the right to purchase it at a price, but you don't have the obligation. Now a put option is the exact opposite side. If I'm bearish on this stock, if I think IBM is about to disappoint in earnings or something is going to obsolete them, they're going to price is going to go down from 100 to 50. I can buy a put option which allows me to sell it at 100 or 90. And if it drops down to 50, then I've got the right to sell it, but not the obligation. So that's the very, very, very basics. But there's another flip side to that. So once more those are. If I'm almost like betting on the price of the stock, I'm going to, I'm going to buy a call, I'm going to bet that it goes up. But on the flip side, if I sell an option, if I sell somebody else the right, if I sell a call or if I sell a put, in this case, a put. If I sell a put at, for IBM at 100 and it drops down to 50 or whatever, then somebody has the right to make me buy that right at a hundred dollars.

Sell to us. Yep.

Yeah, exactly.

Seller of put.

Yep, exactly. Now what I get in return for selling that option is I get the option premium, I get money. Now that might be, let's just say $100, right. Or 5. It all depends on the price and the number of options you do. But that's the way you create income by selling options. But you get to speculate by buying options. Now did I cover the most foundational stuff of that correctly or did I miss it? Mix anything up?

Yeah, it's really. Yeah, that's really accurate. I would add too, when you, once you moved in to talk about selling options and you talked about selling puts, the obligation is that you're collecting money and then your risk is you have to buy the stock at a certain price. I'll just add, because everyone's heard of Warren Buffett, that Warren Buffett loves selling options. Specifically when he wants to take say a bit. Let's say he wants to buy big amount of shares in like Union Pacific. He wants to buy a railroad. He will sell puts like the dickens because why he's decided he wants to buy the railroads. He likes the price. He'll sell put options and get paid to own the stock that he wants to buy anyway.

Yeah.

I'm just saying if it's good enough for the richest person in the world, one of them. Maybe you should learn that too.

Yeah, Preston, that, that was one of the few pieces of experience I had with options. So I'm not coming in totally green. Is that. Yes. Whenever, if I, if there's a stock, let's say Disney, right. And I actually did this on Disney several years ago. I thought it was in a good position. It was selling right at about a hundred. So I sold an option at about a hundred. And I think I collected two dollar premium. Two dollars per share premium. And so I, I just got that money. Now if Disney would have continued to go up, I would have missed it. But I made a little bit of money. In this case, it dipped down. It went down to, I don't know, $97. And I now got put that option. I mean that stock, they, I was forced to buy it, but I now I was forced to buy it at $100 minus the $2 premium I made. So that means my cost basis was 98. So I got to purchase a stock that I wanted to own anyway at a lower cost basis than if I would have just bought it at the market. Now that is the majority of my extent of option trading. So I've sold puts on stocks I wanted to buy anyway to get them at a lower price. Exactly.

The money press is really just a variation of that mindset. And the key component of it is maybe you're trading with 5,000 or $20,000 trading account and you don't want to own hundreds of shares of Disney. We can still generate that income without ever taking ownership of the stock. So it's a similar. I like that you had that experience with. Without needing to have all that capital tied up in owning the actual shares.

Okay, I love that. Now let's dive into some of the mechanics of how this works, because one of the, one of the risks I take when I bought that stock, right, I. I got a little income and then maybe a week later it went down and I ended up owning the stock. Now the big risk I have is that it went down to 97, but then it could have gone down to 80 and 70 and 60 and 50. And now my loss could be really big there and I just have to ride that out. So let's go in. Now.

You'd have to really like it at a hundred. When it turns to 70. It's. I really. Anyway. Yeah, you don't want to get caught doing that.

No, exactly. So now this is, so this is a good opportunity, I think, to start to dive into the mechanics. But as we mentioned to folks before who've not got any experience with options, give you the obligation, but not, I'm sorry, the operating, the right to do something, but not the obligation. If you buy one or if you sell an option, it gives you the obligation to do something, but you also get income from doing that. So if we keep those two little pieces in the back of mind, I think hopefully the rest of this will make sense. So let's go into what the money press is, the history of it, why it is uniquely effective, and some of the results you've been getting from it.

Absolutely. When they, when it start, the options. Options, like what Plain vanilla options started in the early 70s and they were options on 12 different stocks like probably IBM, Exxon, Apple didn't exist back. Maybe that anyway. But. And it, it caught on. There was only calls and then it started catching on and so it expanded and expanded. But the week. And so those traditional options expire every month and it happens to be the third Friday of every month. And so the weekly options when they were born, it was the spring of 2010, so relatively new. A lot of people aren't familiar with options anyway. They might have heard of them. But I would guarantee no one on your block realizes there's weekly expiring options. And what's really interesting about that is within a couple of months of them being born already then 25% of the entire option volume universe was happening in the weekly option. For some reason, those get the most attention. Meta or Microsoft or name the stock the speculation is heaviest in where it's going short term. I don't know why. It's not the nine month out, it's not the year and a half out, it's not the three month out, it's the weekly. And so what happened is premiums, what those options cost because they're, they're so interesting and they're so of interest. It's almost like the next weekly. What's the most active sports betting right now as we're starting football season? Is it a game a month from now? No. Everyone wants to know. Everyone's betting on the jets and who they're playing and they're emotional about it. And what happens in the options market is the premium. If you wanted to speculate left and right on where Apple's going to end the week, that it's very expensive thing to do because that's where the action is. But the money press turns that right around. And we constantly focus on and teach to sell those weekly premiums, the ones that are so excited and full of pump and pizzazz and speculation, curiosity, it's all feeling this and we're, we, we, we, Mike and I talk about it all the time. You actually get to the point where it's actually pretty boring to do because we're not sitting there guessing where it's going. We're collecting that premium and then we're watching what we call a time decay curve. These options are dying very quickly from Friday to Friday and that works in our favor as the seller. We, we want it to go to zero.

Now you brought up something really important there. Because I know that time to expiration is a very important part of understanding the way options work. Right. So that I can buy a long term or buy or sell a long term option like a year down the road or six months or three months or one month. But These weekly options oftentimes get overlooked. I know that until I started to look into what you all do a little bit, I never even understood weekly options at all. I was just like doing long term stuff. So let's talk a little bit about how time influences both the cost as well as the premium that you receive when you either buy or sell.

Yeah, every option is, and I'm going to turn have Mike come in here too. But every option that exists right now as we're speaking, all of them have an expiration date. And so all of them are suffering a time decay. And if you can picture it in your mind, you'd think the time decay would just go on an even keel from a left part of the graph to the right, that it would just go down in a slanted line, just all perfect and nice like that. But the fact of the matter is they hang on to value. They hang on to value and they really start dropping off toward the end of their expiration on a weekly basis. It's just doing that constantly. Every time the week starts, it's suffering a very fast death that comes off right at the end. And we liken this to everyone can get around the Baskin Robbins and we, we joke about this, but the fact of the matter, we have a strip mall not too far from our office. And, and Mike actually grew up in this area and he has seen first of all, the only, the longest lasting tenant is Bennett Baskin Robbins store. There's been three different, four different banks out on the banking pad. There's been different nail places. There's been a recruiting office and it's been Navy, it's been Air Force, it's been Marines and whatever the other army. We've had three different gyms in there. But Baskin Robbins is the only surviving tenant. And when you think about their business model, that all comes down to margins. They buy that ice cream in a big five gallon tub and then what do they do? They sell a single to you for really is an exorbitant price compared. I actually googled this. You can get about 100 scoops of ice cream out of a five gallon drum. And those five gallon drums cost about 25 to 30 bucks. But they can get 100 scoops. In San Diego. They probably cost six dollars a single. Here I think it's close to four now.

Yeah.

So let's just even dial that back. If they sold it for three a scoop, that's $300 compared to a cost of 25 to 30. And how does that deal with Options and weekly options. You could think about you selling the weekly options is like selling a scoop of ice cream that's exorbitantly. And no one's buying the ice cream with their arm. Like saying, oh, uncle on a hot day. Oh, I can't do this. They're willingly putting their money down. And then we're buying our sleep at night protection. And this comes in what Mike said. We're never owning the actual stock. We're using the energy and the trading and the volatility and the price of the stock. But we're structuring the money press where we're selling a single and. But we're. Our sleep at night is we're buying out in time, maybe three, four, five months out there in expiration. Basically, that's our 25, 30, $5 gallon drum of ice cream.

Okay, I think, yeah, that, that's starting to make sense. So obviously Baskin Robbins, they buy in bulk and they sell singles. Like you just said, you get more out of it and there's where the margin comes from. Correct.

They're not publicly traded. So we can't do a money press on Baskin Robins. They might belong to some conglomerate. Maybe they.

I just think we need to screw option trading. Let's just start ice cream shops. That said, let me make sure I understand this before we move on because I think I really get this and I like this metaphor. So time is really important. The more time you have to exercise this option, whether you've sold it or you're buying one, typically the more money you're going to make, the more money you're going to make. So if I buy an option, if I buy an option that expires in six months, I've got six months for the action to happen that I want. So I'm going to pay a certain premium. If I buy an option that expires a month from now, I'm probably not going to make as much money.

Right.

And on the same thing, if I sell an option way down the road, maybe it's $5 for it. But if I sell an option that is like a month away or even a week away, I, I may only get a few bucks for it. Is that right? Like it's the law or am I messing that.

No. Yeah, you're, you're tracking along there. What's crazy, maybe people listening to this have done the covered call strategy where you, you own this is real traditional as far as selling options. But you have to own the stock. And then traditionally before weeklies you were selling these one month out premiums. And so just to give you the math, and this happens across the board. If it's a tractor company, if it's a cloud computing company, if it's a pharmaceutical, across the board, you'll generally see this. Whatever you are selling that one month premium for, let's say it was $4 when you sell weeklies. Instead, just sell it by the week, you will see a $2 weekly premium. So you'll get 2, 4, 6, 8. The $4 that you were getting before the advent of weeklies. By selling, by selling weeklies, you are doubling the amount of premium that you're making.

Oh, okay. So I have an option compared to.

The one month ones.

Oh, okay, that makes even more sense. So I could sell an option on, let's say Disney that expires in one month and maybe I make four. Four bucks. But if I sell an option that expires in next week, maybe I make two and then I do it again next week. And then I do it again next week. And so I do it four times. And if it's about $2 every time over the course of that month, I may collect $8 per share premium.

Yes.

But had I done it just in a one month thing, I'm only collecting four.

Exactly. And so why would anybody selling monthly options out there. We'll just politely call you a horse's patoot.

So, yeah, why would anybody do monthly options when they're selling if I. If they could do weeklies?

That's what drew us in to this Money press strategy was some of that math. And then just to really clarify, if we're buying the protective side. Right. So the. We've been talking about that income selling the put.

Yeah.

And really increasing our income potential with these weekly options. But then that the Baskin Robbins example, we're buying that protection, Tom, maybe four months out in time where it's experiencing really little time decay working against us. So that's like buying that Baskin Robbins in bulk. And then we're picking off these weekly premiums at a really big. Just the premiums are really pumped up and expensive as we take advantage of that weekly income.

I love that.

Exactly. Brad, can I. Let me just add something too, where everyone listening this would agree. Every time you turn around, a week's gone by. The week seemed like it's been a couple days. You got the weekend you're doing, busy doing your thing. Oh my gosh, a week has already gone by. It's crazy. And I'll also add this, that back in the traditional way, if you will, of selling premium. It's not your three months doing that where you're running into an earnings announcement which is like the biggest day in a stock's life. There's four of them a year. People probably have experience know that companies can announce, they can really move higher, they can really move lower. That's hard to deal with running into that you're selling two months and then third one, there's earnings. So by going weekly, you're doubling your income. And also we can fit these money presses in between earnings announcements. We never really get a deal with them if we don't want to.

Okay. Okay. I love that. Preston and Mike. Okay, so we've got, we're selling weekly options on stocks that we feel are either gonna. Because we're selling a put option which forces us to buy the stock if it goes down, but if it goes up or technically sideways.

Right.

Then that option is going to basically expire in a week and then we can do it again and we can collect more money. So every single week we get to go collect our paycheck. And as long as the stock we pick is going up or sideways, then we're not going to be forced to buy that stock.

And even slightly down, by the way.

Or even slightly down. But as long as it just doesn't drop through the floor. Now earlier you talked about, you alluded to this about the downside protection. How do you protect your, limit your risk and protect that? And I think you mentioned something about buying longer term puts. But can you go into detail? Because I think for myself or anybody else thinking, oh yeah, this is great, I'd love to collect this money. What if the stock goes down? What if, how much money do I lose? Let's talk about downside protection.

And, and we, and I'm going to hand it to Mike. I, as you guys can hear, I get really super excited about this and you probably need just a, an ear break from someone like me. The, the mechanics are we sell the weekly put underneath it, we buy a put, which is our protection. It's our sleep at night. Just a small little fact on that since the advent of options. And who really clears these is the, the occ, the Options Clearing Corporation. There's all these things set up. There has never been an option contract since the founding that has ever been defaulted on. That's nice to know. Right. So there's that. But Mike. Oh, where were we going to go?

We were talking about downside protection.

Yeah.

Because if I understand It.

Let's walk.

Can we walk through a hypothetical?

Yeah.

Let's use your Disney example, right? You were talking about Disney trading at about. At 100. Just an even number. Easy to remember. If we sold the 100 put. Now, that's the weekly. That 100 put. And use your math. That used earlier, Brad, that $2 premium coming in, if Disney stays at 100 through that whole week, it just bounces around, finishes flat. We keep that whole $2 premium. Right. And that's per share. A contract represents a hundred shares. So cash in your pocket, that's $200.

Okay. Yeah. That's like the minimum. Because you can. If you buy one. If you buy one contract that obligates you. If you. I'm sorry. If you sell one put contract that obligates you to purchase 100 shares of Disney. If the stock price drops enough for that, somebody else to force me to buy it. Right. So that means that I have to have. I'm just backing this up. I have to have at least. What is that, ten thousand. Ten times a hundred. Right. Is that a thousand or ten thousand? I was like, wait a minute. I have to have a thousand dollars in my account in order to do that. So that's how much I have to have in my account. But I'm not trading that. All I'm doing is reserving that. But I'm immediately receiving $200. I'm not buying anything. I'm receiving 200 bucks. Yep.

Someone's paying you. And think about what the other side of that contract's doing. They have the right to sell at a hundred. If Disney's trading at 110 cents, they'd never want to sell it to us at 100. They just sell it on the open market and get that extra 10 cents.

Yeah.

So that 200 bucks that we got paid that contract becomes worthless and we just get to keep that money. Now, what if Disney goes up to 101 or 102 or 110 in that week? Now, it's even less likely for them to want to sell at 100 because they can sell it for 102 or 103 on the open market. So if Disney goes up or stays the same, that 200 bucks becomes ours to keep. Now, you were talking about downside protection. What if it drops to 98? We got paid $2. Right. We got paid that $2. So we actually have a little bit of downside cushion.

Right.

At 98, we would now pay $2 on expiration Friday to close that out. So we actually have this wiggle room to the downside on the trade. We have $2 of cushion, 2% in a week of some cushion to the downside. If it went to 99, if it dropped a dollar, we could close that out for a dollar and still make a hundred bucks because we got paid $2. Fit dropped to 99 by expiration Friday. We're paying 100 to close it. We got to keep the other 100.

So we and then turn around and sell the next week for another two or two dollars.

Like Preston said, you can actually still profit if these drop a little bit. And I know most people historically have horrible timing with trying to trade. So it's. If you jump in when Disney's at 100 and it drops to 99 and you can still make money, that gets people pretty excited. Now, that's just the one side of the money press. Selling that 100 put is just that one side. We also come in and buy like you were referencing, Brad. We buy a put. So we're selling a weekly. That's our income. And then we're buying maybe three, four months out in time, an option contract that expires three or four months out in time. And that might be at the 95 strike price. So Disney's trading at a hundred. Tom, we're selling that 100 put that expires in a few days, the weekly. And then we might buy the 95 put three, four months out in time. Now, what that does is that put, like you said right out of the beginning and your breakdown of just what's a call, what's a put, what are options? When we buy a put, that's gonna make us money if the stock is going down and we actually now have the right to sell at 95. So what we just did is we created a known downside exposure between that 100 put that we're selling that we're getting paid 200 bucks for, by the way. But we're selling that 100 put. And then we own now protection at 95, the 95 strike price. And we have that protection for three or four months out in time. So if that protection is way out, three months, we have week after week, we can keep picking off that $2 a week premium. And not every week's going to go perfect, right? You're going to have a week where it does drop from 100 to 96 or 95. And in that scenario, we might lose a little bit on the short put, that 100 put that we're selling. But then our 95 put is making money if the stock goes down. So if it does go against us, we've got this defined risk that before you ever even click that submit button to put your order through and get the position filled, you can position size, you can build your risk tolerance on exactly what you want it to be before you even enter the trade. And that's rare.

Did you guys hear that noise because. Or is it just in my head? It was a big click.

I think I snapped, but that's good, too.

Yeah, yeah, I think it just clicked exactly. Exactly what you're doing. And especially on the downside, because, hey, what's the number one rule of all investing according to Warren Buffett? Don't lose money.

Right.

And if you're going to lose money, know how much you're going to lose. So, yeah, you actually just said something that gave me a bigger epiphany on the downside, which is what I really care about. Yeah. I'd like to make that weekly income. That's fantastic. But I want to make sure I don't lose money, or at least if I lose money, I know how much I'm losing. So in this scenario, let's say the price drops down to once more. We sold a hundred. We made two bucks. Which means that if we get. If it goes down enough, I may have to buy that stock. But now my cost basis is really $98, because I'm buying it for a hundred, but I already made $202. So now my cost base is 98. Now I've got about a. I can. I have the right to sell it at 95 if I want. So that's a less than 5% risk that I'm taking on my capital there. So let's say the stock drops down to 90. I can sell it. Yeah, I bought it, in essence, for 95, but I can sell it. I'm sorry, I bought it for 98. I can sell it at 95 if I want. So I'm. Hey, I'm protected. I know how much I'm losing. But correct me if I'm wrong, let's say that the price of that drops down to $80.

Now, theoretically zero.

Or theoretically zero.

Yeah. Anyway. Yeah, yeah.

But that $95 put that I own gives me the right to sell it at 95. I don't even have to exercise that because the. I can actually sell that option. Right. For probably 5, 10, 100, like, whatever. I can sell that for a bunch of money as well. So not only can I sell the stock that I own, I have a, I have an option that's worth even more money.

So yeah, you never have to deal with the stock with these. You never have to take delivery. You could just close it on Friday, the weekly put before it ever expires.

Okay.

As the chance for stock to come into your account. You can just close it.

Okay.

Yeah.

If it does happen to drop to 80, some bad news hits or something out of the blue, which is going to happen from time to time. Usually with these stocks it's a little safer bet. But those stocks that we like to trade the money press on, that is. But if it were to jump down to 80, you've got the right to sell at 95 and you still maybe have three or four months of time left. So there's time value in that 95 protective put. So like you said, we could just sell that.

Okay.

In that scenario, your risk is going to be pretty capped and limited to just a few bucks. And then if you, if that happens to happen, Tom, that dropped down to 80 maybe on week three or four of the trade and you've already collected a few weeks of that $2 premium, that thing could tank on you and you still exit out of that thing overall profitable.

Yeah.

Because that defined downside. And if you got a couple weeks of some income in the door, you could still be in, in the green on the overall position. No way to lose going from 10 to 80.

So it's. If you can get a couple, two, three premiums in the door.

Yeah.

Really, the worst case scenario is completely covered.

And then that's interesting. Yeah. Because a slow bleed, it's not a lot like week over week of it just continuously going down like 3 or 4%. You could technically get in there and just keep on losing money, but that actually doesn't happen that often as we know, like over time the stock market tends to go up and when it goes down, it usually you take the stairs up and the elevator down. Isn't that what it is? So you don't. We don't often have these long, slow, long term bleeds. It sounds like as long as we don't have that, this works really well for weekly income.

And let me add a couple, just two things. First of all, I love that we're talking about Disney and not doing penny stocks saying they're supposed to be the next Disney or they're supposed to be the next Netflix. There's. We're doing the Cats. Meow. There's only one Disney. So that's the point. And this is another one on the math, especially if someone's just listening. We're talking about that $2 weekly premium. We bought a protective put four months out. We know there's four weeks in each month. So four times four, that would be 16 weeks of time. And you would think that protective put would be $2 a week, 6. So 16. So that protective put cost $32. You know what the cost of that weekly put for four months out might be $7, might be $6.50. So you think. But that's just the power. Right?

That's buying in bulk.

Example.

Right.

Buying in bulk. And it's really powerful. Really what we're talking about here is we're wheeling and dealing in time. Yeah, I call. I'm a time merchant, I own time and I'm selling time.

That's fantastic. And like now the Baskin Robin thing really makes sense because, yeah, you're buying protection in bulk where it's cheaper by the bulk, but you're selling it single cones. You're selling weekly options. And there's a lot less that can go wrong in one week than there is over several months. And okay, so that makes a ton of sense. Now I want to shift gears a little bit, actually. One of the things I also like. We're talking about Disney and we're talking about blue chip stocks. Are weekly options available on every single stock out there or are they only available on some of the most highly traded stocks?

At the time we're recording this, it's available on about 400 stocks. You have to realize there's tens of thousands of stocks. Right.

And these are probably bluer chip stocks with a lot of vol. Like not, not volatility, a lot of volume and liquidity.

The ones you want to be trading most likely have weekly options at this point. When they first were released, it wasn't that way. There was maybe a dozen stocks, Preston, that had weekly options at first. And so the pool to select from was a little more limited. But as the popularity in these weekly options have exploded, it's just become where it's just almost a non issue. Almost any stock that we're interested in trading has weekly options for the most part, about 95% of the time.

And if they don't have them, you immediately like, what's wrong with this company? And it doesn't. The company itself doesn't decide, hey, I think we should have weekly options. That's totally decided by market. That's decided by the options markets. And another fun thing, Brad, is that the Way servers and the Internet and speed is gone. It was just a couple years ago where basically commissions on options have been almost zeroed out to nothing.

Oh wow.

That used to be a. You'd make money, of course, but it's a lot anyway. You get so much more going to your bottom line when the brokers aren't just there on the take. And this is a weekly thing, right, where they, they loved this back when there's commissions, it's all but nothing.

Because when I started trading in about 2005 to build this Disney trade like we were talking about and sell maybe one contract to bring in 200, you would be paying 20, $25 in commission.

Oh wow.

Merrill lynch was 70 or 80, which was 10%.

Right. That's 10% of your profit. That just went to an overhead expense. Now that's practically gone. It's maybe you've got a few little fees, but of that $200 you can keep 198 of it or 199. So being able to trade online and the way the brokers, their business models have gone, it's really been a good thing for us individual investors.

Okay, okay. So one of the other things I like is that worst case scenario, not even worst case scenario, but if I get, if I am forced to buy Disney, if I'm doing this on stocks that I actually feel okay about owning for long term, yes, I can exercise my protection. But maybe I don't want to. Maybe I actually like. All right, I like what's going on here. I got this stock that I liked cheaper than I would have if I would have bought it at market. I'm just going to hold on to it. So I can do that if I want. I can always sell the protection if I want. So that's actually, it's a sleep at night thing. I'm not doing this on penny stocks. But let's talk about, let's talk about how you actually identify the stocks at least briefly because I know this may even get more detailed. How do you decide what you're doing that week? Like which, which stocks that you're choosing to run this on?

It's, it's the $64,000 question. And can we do better? Does. Is this, does this math exist with the like the Baskin Robbins math? It exists on any stock that has weekly. And so we have to just ask ourselves, do we just throw a dart at the wall and say, oh, we're doing it on Caterpillar. So that's where the dart landed. Could you build A money press on that, if it just landed, sure. But could we do a little better with our spots? Because when we were doing the Disney and you're like, if we went to 80, went to 70, one thing I was thinking, of course I get all excited when I have this bright light bulb thought. I say, brad, let's pick stocks that don't go immediately to 80 after you touch them. And so we've hung our hat. We call these setups. The setup answers the question, why this stock and why now? And one of the best places we like to get in is after a company has revised in a surprise way, revised their earnings higher. Okay. And that tends to start trends. It tends to continue trends. And if a stock's been in a bad way, it turn. It tends to change the trend and start it there. So in just a nutshell, we like observing an earning season is really big for this. That's predominantly the month of January, April, July and October. But yeah, and, but they can happen at any time a company comes out and revises their projections. Their guidance, if you will, higher. And we, if, if the stock reacts in a way that we like to.

See.

Most oftentimes is a dynamite money press situation. We want the stock to hang out, if not go higher.

I love that going.

So anyway, yeah.

So let's talk about what it really takes as far as just start to do this right. If you got $500 in your account, it's probably not going to be a good thing. But in order to really get into a. Just to start doing a money press, what's the approximate account value somebody should start with in order to, to use.

I'll let you take that, Mike.

Yeah, no, let's just keep rolling with that Disney example. So we talked about selling a 100 put, bringing in $200 of income. You're then now buying that 95 put. And that's going to cost you, like Preston said, maybe seven bucks. So that's a $700 investment. But remember, that investment is good for three or four months. So you're putting that money down. But it's not just going to lose value instantly. That thing's going to slowly lose value over the next three, four months. And then there is that risk that the broker sees between the 100 strike price of the put we're selling and the 95. So altogether, that Disney trade might cost about 1200 dollars tom of your option buying power. But then if you have some fun with the ROI, right. $200 weekly return on a $1200 cash outlay. Right. You're putting down $1200 to buy the protective put and to hold some of that margin requirement to appease the broker. You're actually holding about 1200 bucks, give or take, to generate about $200, which is a pretty accurate real world example, actually, these numbers talking about. So if you were to get rolling with this, we always like to say about five grand is a place you can start. Then you could go get maybe two of these money press trades going like we're talking about. Maybe go find a couple other little opportunities to trade because we do a few other things outside of the money press. Yeah, but if you have that five, $10,000 account, you can go get a couple of these going. And now all of a sudden, again, not every week's gonna be the $200 profit, but you start picking off 2, 3 out of the 4 or 5 weeks of maybe 5, $600 in income, a 5, $10,000 account really starts having some performance.

Right.

And then, I can see that rose. It gives you the buying power to add another position. Right. And then it's that compounding interest principle on steroids because we're seeing this really fun rate of return. And so that short answer, 5 to 10,000 is a great place to start. We have people trading millions of dollars. We've had clients that had managed hedge funds of 20, $30 million or $50 million, $100 million. Different people that come and they've had their traditional way to invest and now they're wanting to learn this different way to just have an income strategy. So the money press doesn't have to be everything you're doing. In fact, we recommend it being a good chunk of your trading account, but then still finding some other things to do, which we of course at Trader's Edge can teach you other different ways to do that if you don't know for yourself.

But like you said, the money press can be a little boring. But boring is good sometimes, especially if it's just good old boring paychecks.

And you know what? Go ahead, Mike.

No, I was going to say it's a. You don't need a ton of money. That's what we love about it. And some people, maybe you've got your million dollars with your financial planner and you got a little fifty thousand dollar account you want to have some fun with. This is a great way to start investing for yourself. Learning a new skill, learning to generate some new income, keeping your mind sharp in retirement. There's just a bunch of different reasons why people come to Trader's Edge to learn this stuff.

And how many should we say? We'll say seasoned folks are teaching this to their grandkids as a kind of a fun thing. Just like we were doing this together, Brad. Like these numbers. Oh, time decays. Oh, here's the curve and this little bit of math. And I'll just add too, on what Mike was saying to add more. You don't want to look down and have four or five money presses going. And they're all in the biotechnology sector or they're all in construction or homebuilders. So we like, as we expand them, have something in a pharma stock, have a Home Depot, if it sets up right, not just throwing darts, but let's be in different sectors, in different industries. Let's have a little kaleidoscope. We have Starbucks, we have coffee, we have lumber, whatever. We have software over here. But not all cloud computing, not all.

Cybersecurity, not diverse, diversify industries. Because, yeah, something takes down one industry, you want to the other industries to be good. But. So the other thing I like is whenever you say, you know, let's just say you start with a 5 or $10,000 account, from what I understand about this and what I understand about options, you're not telling somebody they have to go buy 10,000 or 5 or $10,000 worth of security, Right? That's what most people think when they think investing in stocks and options, oh, I've got to put all that money at risk. No, you're literally not putting any of that. You're not putting much of that money at risk. And you're not even buying anything for the most part outside of your protection, just getting income. And only if the trade goes against you are you forced to use some of that portfolio to acquire the stock underneath it. But as you mentioned, you've got the protection, you've got a limited amount of downside. So you're. It's never like your Entire, let's say 10,000 or million dollars portfolio is at risk. It can't just disappear overnight with this. And that's important, I think, to understand.

It is. And. But how it's hard to. This is akin to me walking into Lowe's down the street and say, hey, I'll sell a couple of those hammers, I'll sell some tape and let me sell that roll of carpet over there. You don't go to a store to sell the stuff in the store, you go in to buy. So, yeah, it takes a little rearranging in the brain to realize that you can sell stuff that you don't own.

I love this now. So you, as I mentioned in the beginning, it's not that you all just do this. You at Trader's Edge, you show other people how to do this, you teach and coach, etc, explain a little bit about how this works. So I will say this. I am interested. I plan on going to your website and following the instructions, etc, but tell me a little bit more about how your, how your programs work for anybody else who wants to go a little bit deeper.

Absolutely. Michael, why don't you explain our money press and what we call the on ramp and money.

So what we found. When we tell people what we do, most people out of the gate feel really intimidated by it and they think, oh, that's above my pay grade or I don't think I could ever figure that out. And so what we've tried to do, because we love this so much and we love helping people see those light bulbs come on and learn this. And like on Preston's wall behind him, I don't know if you can see it, but we have emails and people's notes of how we've helped them change their financial situation. It's all over our office. We hang these notes from people. We just love hearing that feedback. But we've tried to make it as easy as possible for people to see if it's a fit for them. So we have this money press method guidebook. Preston and I, we've just poured our heart and soul into this thing. It's. Preston founded trader's edge over 20 years ago. It's like kind of this baby we have. We take so much pride in it and we just give it to people for free, just cover the shipping and handle. We still lose money on it, but we just want you to, we want you to see if it's for you. And it's about 100 pages. You could read it in probably 45 minutes if you sit down and focus. But the whole point of that guidebook is to see if you have the interest in this. And then we have a member, a monthly membership. You can come and go whenever you want if it feels overwhelming. You're not tied down to anything. We just want you to come and give yourself a chance to improve your financial situation by learning this new powerful skill.

So what do you get? What do you get in the monthly membership? So it sounds like the book, like the nice part about this is in this episode we've covered a lot of the mechanics. I believe the book will probably help fill in the fine details for somebody. You said they can get that at Money Press Pro. You go to that website, MoneyPress Pro, you can. How much is the book?

Seven bucks. Just cover that shipping and handling charge. We send it to you and then you'll also get instant electronic access.

Oh, great.

It's inside our Team Hub Team is an ackerman for Trader's Edge Active member. You can get the PDF of the book, you can jump right in, start reading it before the hard copy gets to you in the mail. There's also some other additional training videos in that Team Hub, that website that you get access to. All part of that $7 money press method guidebook.

People talking. There's community in there.

Yep.

So the big question I have is, and because you mentioned also a little monthly membership, is there an opportunity to look over your shoulder at what you're buying and what you're trading personally and whatnot, and what stocks, what entry points, etc?

Yeah. Once you've experienced the Money Press method, that guidebook, we have an On Ramp series that kind of helps. Just elaborate on the Money Press method book. We have what we call our wow. Insider membership. WOW is weekly option Windfall Insiders. Because we're just taking advantage of these weekly option windfalls with the Money Press and some other strategies. So as part of that membership is they gotta join Preston on a Friday webinar, see what he's trading, talk about current market conditions. Preston sends out an update pretty much every day, an emailed update, what he's trading, if he's starting a new trade, how he's adjusting existing trades. So you actually get a peek over his shoulder, see exactly what he's trading, and then it's still up to you to decide, hey, I like this one. Let me do my own research. Maybe I'll put my own money into this one. And you have that opportunity to trade right alongside Preston until you're ready to kick off the training wheels and do some on your own. But we have a ton of people that just love to follow Preston because it's just a shortcut, it's just a saver. Right. Instead of doing research and trying to be an engineer, a doctor in sales or whatever they might be doing, they can just read an email from Preston and get trade ideas. So we've tried to build this wow. Insider membership is just a really easy next step. If it seems like something they're interested in. There's more training videos on different strategies when you're ready to graduate from the Money Press. Once You've got that a little more dialed in. Maybe after your first three, four or five weeks, you can go check out some other strategies. But it's all there, ready to go. And it's just we've tried to make it really easy for people to get started because we know most people have been really frustrated with trading in the past.

Yeah.

And understand options. It was confusing as hell. Or they just. They gave up because they didn't know what they were doing. We walk through examples. We walk through placing the trade in different brokerage accounts in that on ramp series. We walk through step by step how these trades work. And we just want it to sink in. We want that light bulb to flip on. We want you to make sure you really understand this. So you have that potential to make that 200 bucks a week on a 1200 investment. It's just so exciting. We want people to understand it and try it.

Yeah. I'll tell you what. You're convincing me to give this a try. Granted, I've got some options experience. I've got an options account. It's very easy to get. I've got money in there. I've done some minor option trades. But one of the things I love. I think a lot of us love the idea of income. There's two ways to make money as investments. It's speculation and hoping for capital gains. Buy low, sell high. Or there's ways to make income. A lot of times that's just dividend stocks or buying real estate or something of this nature. I really am intrigued by the fact that I can use options which limit my risk and create weekly income where I actually do not need to make a big bet on is this stock going to go up or by how much. I just have to hope that it goes up or sideways or maybe a little bit down. And every week I can get in there and collect. So you've definitely got my attention on that. I also like the fact that the downside is limited and that I'm going to be only doing this with stocks that I might be okay with owning anyway even though I don't have to own them for the long term because of that protective put or insurance that you've done. I love the fact that it's an hour or less of trading this specific method a week. I do not want to be a day trader. I'm way too busy to be diving into this. I also like the fact that I think I understand the new, the at least the 80, 20 of this simply from this conversation today. So you Guys have checked the boxes and I will say to my listeners, I have not heard any red flags yet. I understand enough about investing in options to go like, no red flags, no bs because I understand how this works. Yeah, so this has been fantastic. So that book that lays it all out is Moneypress Pro. Folks can, you know, buy the book. I'm gonna buy the book and check it out. One big question some other folks may have. Why. Why do you teach this? Why are you not just making all this money, doing it all on your own?

Preston Yuan. Yeah, I slightly different answer to that, but go ahead.

The trading bug bit me a long time ago and I. I was just thinking of when you were talking Brad, about. I was just thinking the traditional way of trading is just so exhausting really at the end of the day to try to day trade because you have to do it, you might have a successful trade then you got to do it over and over and over again and watch it and everything like that. But anyway, when weeklies came out, it was such a sea change, such a landslide in my thinking. And I'm just so passionate about this. And I was that frustrated trader and what I found was when I found this light bulb and it was clicking and I'm like, man, I hope these weeklies never go away. I. What I found too is what when I've shared things over time in a subject that I'm just completely passionate about and love, I've got a lot of reciprocity. I've learned more when I've shared and otherwise, trading's a pretty lonely place. Sitting here by yourself and I like people, I like meeting people. And I just started sharing this and I've never really. It's never felt like a day of work in my whole life.

That's great.

And I just thought we have a little tagline in traders, Ed. We're rescuing one frustrated trader at a time.

That's fantastic.

So I've met fascinating people I like. I said that law of reciprocity, when you share and they teach you something too that you otherwise wouldn't have ever learned.

They say when one person, two people learn. Right. So I teach as well and I train in a lot of people. Like, why do you do this? I learn so I can do do I do so I can teach and I teach so I can learn. And it's a pretty virtuous circle. So that's great. I was hoping so.

I don't know if any of that.

Made sense, but it made a lot of sense. I know that you Guys have got a new student in me. I'm gonna go to Moneypress Pro. I'm gonna try it out. If any of my listeners wish to join me on this journey and see if we can press some money from Preston. James, why do they call you the Pirate, by the way?

Oh, my gosh. That caught on way early. There was a gentleman, he learned something new and he just says, oh my gosh. That's like finding the buried treasure. And somehow the pirate nickname stuck. Mike, I wanted you to share what it sounds like you were going to say something too.

I just love being able to interact and bounce things off of some pretty brilliant minds with different backgrounds. We've had truck drivers, seen incredible success. We've had real estate developers, attorneys, doctors. Just the whole gambit of people. One of my favorite clients ever worked with was a veteran that was on disability, suffered some head injury, and he just was so thrilled that he was able to take this. I think he started about a 30 or $40,000 account. When we got it up into a six figure number, the email that I got from him, it was probably my second year of being with Trader's Edge. I started with Preston in 2009 and I was just like, wow, like, we changed this man's life. He never thought he was going to be in this financial situation and he was so grateful. It just made my week, made my month, really, just to know this gentleman that had served our country, had sacrificed so much. We were able to teach him a new skill that, that completely transformed his financial situation. And that's just, that's rewarding. Me and Preston both just love, love hearing that. So there are some selfish reasons, of course, but we do love helping people improve their situation. We get a thrill from that.

Well, I've got. I'm very happy with my situation, but I'm also looking to improve it. So I'm looking forward to diving in and I will email you when I do my first money press trades.

Oh, yeah. We want to hear from you, Brad.

Gentlemen, thank you so much for sharing all of this with myself, my audience. If anybody's listening to this and whether you're brand new to this option trading stuff or you're a seasoned pro and you want to see if Preston and Mike have a little bit of extra nuance that you can utilize, Go to Moneypress Pro and you will get to see everything they're doing. And as you said, you've got a book. You're just. People pay for shipping, you get it for seven bucks. They go through everything. We talked about in more detail and I think you also said you had a monthly kind of access coaching program where you get to trade and look over your shoulder, see what you're doing, get your market insights etc. So I'm really looking that's part I'm actually looking the most forward to. I will thank you gentlemen let you get back to your trading day. I know today the FOMC is meeting or has met and we'll hopefully we don't get off this interview and you know get a big surprise.

But hey we got the protective puts.

There you go, there you go. That's a great way to put a this to a fork in this episode. If you are listening, you're watching this on YouTube hit subscribe. Leave a comment, let Preston and Mike and myself know what you thought. If you're listening on itunes or any podcast app, send me a review and make sure to subscribe to get more episodes like this. Gentlemen, thank you very much for everything you're doing.