 What's up everybody, in today's video, I'm going to show you how to sell put options using the Interactive Brokers Trading Platform. For those of you that may not know, Interactive Brokers is a very mainstream, very popular stock and options broker out there today. They're available for traders and investors around the world. I personally use them and I love Interactive Brokers. So what I'm gonna show you today is a few different ways that you can set up their trading platform and to just sell individual single put option contracts. I know I've been getting lots of questions asking me to just do a quick video on how to sell put options using Interactive Brokers. So this is what we're gonna do today. So sit back, relax and let's go over it. For those of you that don't know me, my name is Lee Lowell and I'm the founder of Smart Option Seller, that is our website. Our bread and butter is all about selling put options. And before we get into how to actually trade them at Interactive Brokers, I want to make sure that everybody can get a free copy of our Put Selling Basics ebook. If you go to our website, smartoptionseller.com and you click on the Put Selling Basics header right here, you can get yourself a free copy of the Put Selling Basics ebook. Scroll down here and put in your name and email address and we will send you an email that includes a link for the free copy. All right, so let's just get that out of the way. Now we're gonna go back to the platform. This is Interactive Brokers platform and I'll also show you a little bit later on. If you don't wanna use Interactive Brokers, we have a list of other brokers on our website that you can, well, just give you a sample of some names that you can try them out if you want. So stick around for that. So when you get into Interactive Brokers, if you've already opened up your account, let me move myself over here. Once you've opened up an Interactive Brokers account, you will be, I'd say, presented with a couple different ways that you can set up their platform. Now, I started with Interactive Brokers probably around year 2000, so I've been using them for roughly 23 years now. Back when they started, if you look down here at the bottom, there's a couple tabs down here. This tab right here, which is called Classic TWS. TWS stands for Trader Workstation. When Interactive Brokers first started, they only had this one classic TWS setup. Okay, it's this old looking screen here. Sometimes I get, you know, some of my students, you know, make fun of me because I'm using this old school style of their platform. And the other versions are this Mosaic that you see down here and Option Trading. I'm gonna click on those tabs as well and show you. But what's all about selling put options today and how you do it at Interactive Brokers. So I'm gonna walk you step by step a couple different ways for you to set up the platform to sell an individual put option contract. Now, if you're using the classic TWS like I do, this is how you do it. Let me go step by step. So this is when you open up the platform, you're gonna get hit with a blank screen here. I obviously have a couple of tickers in here already. And along the top here, you can create as many tabs as you want. They will open up to different screens where you can put in different tickers. And you see this little plus sign here. If you click on that, it will create a new tab. One of these, you'll have to give it a name and it'll look just like this. Okay, I'm not gonna do that now because we have a bunch here already. So we're gonna go back and you can name it anything you want. So in my first tab here, I just have it named quotes. And let's start the process of how to set up a put option contract that you can sell and at least watch it. It'll give the price of it so you can track it during the day. So we're gonna use Apple as our example here. And so when you're in this window here, this is the quote screen, just click on a line here and it'll bring up this white space here. And you just click in the ticker. We're gonna use Apple in this case. It's AAPL. And once you type in and you hit enter, and it's gonna bring up this long list of choices of Apple that you can choose from. Now, we always wanna put in the stock first and the stock is gonna be the smart directed. That's just the exchange that Interactive Brokers will choose. It's just giving you the best prices for that stock at that moment in time. It's called smart routing. Okay, if you're gonna put in an order to buy or sell Apple stock, it's gonna smart route it. I mean, it's gonna send your order to the stock or options exchange that gives you the best prices available. So here's, it opens up to the stock price. So this is Apple stock, okay? So we always wanna know the price of the stock before we trade options. That's just how it is. Okay, so if you want to now put in, and get a quote for an actual option that you're interested in trading, you click again, align, you type in Apple symbol again and you hit enter. And now what you're gonna do is you're gonna come down and click on this options link right here. You just click it and what it'll do, it'll bring up this other window right here where now you're going to choose the specific single or multiple option contracts that you wanna put on this quote screen so you can see the price. So here's the tabs. These are all the expiration dates. It'll show the first couple if we expand the screen here. I can't, I guess it doesn't allow you to open the screen more. So here's the first three expiration months if you click on this more, then you can click on some of the later expiration dates. We're gonna just use May and we wanna look at a strike price. We're gonna look at the $100 put strike price. Okay, you got calls on the left, puts on the right. And here's the hundred strike. So all you have to do is click on the bitter ass price and it'll bring up the ticker in the screen here. So now we clicked on it, we close this window. So now we have the Apple May, 19, 2023, 100 strike put option. And here's the last bid ass price. So today is Saturday, March 11th, market is closed. So this is the last prices from yesterday, March 10th, 2023. This 100 put went out 27 bid at 30 cent offer. So now if you're interested in trading this contract at least you have the bid and ask the prices for it so you know where it's currently trading versus where the price of Apple stock is trading. You know, options trade based on how the stock is moving. Okay, so the stock price changes, the option prices will change as well. So let's just say the market's open and you wanna sell this put option contract. All you have to do is click on the bid price. Just click it and it's going to create a new line here and it sets up the order for you. It's selling you that you're gonna sell. When you click on the bid price, it creates a sell order. If you click on the ask price, it's going to create a buy order. But even if you click on the wrong thing you can always click on the buy sell and choose whether you wanna do a buy or a sell. And you'll notice that the colors change as well. Sell is designated by red. So now we're gonna sell and you can choose the contract amount, only one contract. So all you have to do is click in each one of these boxes and it'll bring up a different, a dropdown. So if you wanna do it for day only or a good till canceled you can choose the instructions here. So we're gonna do day only, limit price, market price, a stop, all these different things you can do. But for simplicity's sake, all we're doing is we're gonna sell one contract at a limit price and when you click here's the price box right here. You're gonna click in the price and you wanna try to sell somewhere between 27 and 30 cents. So we're gonna choose 28 cents, okay? And once you do that you can either hit transmit or if you want, you can right click over here and you can, what you always wanna do prior to selling the put option is click on the check margin slash performance profile. This will bring up a new box. It's like another safety valve before you actually put in the order. And so you just wanna double check to make sure what you're going to do. Now this box here is the order preview box and it's telling you what you're going to do. You got an Apple May 19th, 2023, 100 put and you're going to sell one contract. See it says sell one right here. Limit price of 28 cents per contract and it's gonna route it to their smart routing system. But down here is what you wanna focus on. It's telling you if and when you sell this put option you're going to collect $28. That's how much money is gonna be deposited into your account and here's your estimated commissions and your total price after commissions is down here, okay? Focusing over here gives you the information about how your portfolio value is going to change once that transaction goes through. Now this is Interactive Broker's paper trading fake money account. Okay, everyone who has an Interactive Broker's account can also open up the paper money account and I highly advise you doing that if you're just starting out trading options. They start you out with a million dollars and so you can practice any strategy that you want. So here's what's gonna happen. Before this order goes through, here's the current value of your portfolio, okay? It's about a million dollars, 53,000. That's how much money is there right now. Before you make the trade you have no margin. So when you sell put options or when you sell option contracts you're gonna be using, you're gonna have a margin requirement. If you open up a margin account you're going to have a margin requirement. I made another video about a video about what margin requirement is. I'm gonna put that on the screen towards the end of this video. So if you wanna watch that, you can. I'll also put a link to that video down in the detailed description below. But here's what happens. After you sell a put option you're gonna get about $26 net, okay? Maybe a little bit more depending on what your commission's gonna be. And here's how much money will be in your account after the trade. So you can see from here this amount to this amount is $26 more because you're selling the put option, you're going to get $26 extra put into your account. So your account balance goes up by $26. Now here's some information that you want to concentrate on as well. When you sell a put option there is going to be a margin requirement. The margin requirement is amount of money that interactive brokers or whatever broker you use is going to hold aside as collateral while the trade is active. How much money is that? Interactive brokers is roughly 10% to 20% depending on your account here at least in the paper trading account it's about 10% hold on your money. 10% of what you may ask. Well, if you have to buy 100 shares of Apple at $100 a share that's $10,000. So when you sell a put option you're obligating yourself to potentially buy 100 shares of that stock at that strike price. With $100 strike price you're gonna buy 100 shares that's a $10,000 potential outlay of cash if you have to buy these shares in the future. But by using the margin requirement interactive brokers is only going to ask you for now to hold about $1,030 aside as collateral. So that's about 10% just a touch above 10% of that $10,000. So you'll see here before the trade is done you have the zero initial margin after the trade is executed if the trade gets executed at your 28 cent price now you're gonna have $1,000 less available to use out of your million dollars. So you need to understand if you have a $5,000 account and it's gonna take $1,000 of margin to sell that option you're gonna have roughly $4,000 left in your account to play with. So we're not gonna use this trade we're gonna close this box. So that's the first way if you wanna get out of this you just right click over here and you hit discard. So that's how you set up one way how to sell put option interactive brokers that's part of the way that I do it. Now also you can open up another window the options chain window. So this is what's called the options chain feature in interactive brokers and you can open up this window right here. I like to use this window almost more than anything because all along the top here you can create multiple tabs for multiple stocks that you're interested in looking at and you can quickly just go through these and it's gonna pull up all the option prices for that stock calls on the left puts on the right and here's all your expiration dates and you click the more tab. So you can this is a really good way to keep a lot of stocks that you're looking at in one place and checking out all their options. So we're gonna go to the Apple screen here the Apple option chain same thing we're in the May expiration and we're gonna scroll down to the here's the 100 puts. So once again all you have to do is click on the bid price to set up the sell order and up here you're gonna see the order line which looked just like the one that we were using in the other window I showed you. So once again here's the May you can open up this line a little more. So here's April, I mean I'm sorry the May 23 100 put 27 cent bid 30 cent ask you're gonna sell one contract and once again you can click in all these boxes same thing 28 cents we're gonna put in here and once again you can if you click transmit or you can let me cancel that you can either click transmit or you can right click here and you can look at some of the other things you can attach bracket orders and things like that. So check the margin once again it's the same boxes before same thing we're doing the same trade. So you're gonna get hit with the same information. Okay, so that's the second way number two how you can sell put options at Interactive Brokers. So let's go back to the main screen here. Now if you click on the Mosaic tab the Mosaic will bring up a more modern looking I should say type of platform and information where you can have multiple windows and you can set them up exactly where you want. So here we also have Apple you got a little chart here you got some another watch list here with multiple tabs. So what you wanna do here is go up to the new window and open up option chain and you can resize this thing let's get out of here hang on for one second got some I apologize about that we had a little technical internet glitch there so we were talking about Mosaic so we wanna open up a new option chain within the Mosaic platform here so you go up to new window and you click on option chain. Okay, so this is going to bring up the window for the actual Apple option chain and you can resize it and you can put it wherever you want. So once again we're at the May expiration and let's scroll down to the 100 puts here right here let's open this up just a little bit more so it's a little bit easier to see. Once again we click on the bid and it's going to bring up a window here. Let's see where's the okay so right up here this is the order window. I don't use Mosaic that much so just forgive me if I'm going a little bit slower on this one here it's putting the May 100 put we're gonna sell one and right down here is your little order line, okay? Your quantity one you can always click on it if you wanna change the size. The price is gonna be 28 cents, okay? So when we hit submit and there's a little advanced button right here for other items along with the order but this is very simple we're just selling a single put option contract so there's not much to it. Click on submit and it should bring up the once again the box here that tells you what's about to happen before you actually hit override and transmit. Now the override is it's giving you this little warning here saying that the price that you wanna sell the option for is beyond some limits that they've set which is not true. I don't really know why this thing's coming up but all you know is that you're gonna sell it for 28 cents and you hit override and transmit, okay? So we're gonna cancel out of that. So that's the third way now that you can sell a put option at Interactive Brokers. Now you can configure the Mosaic any way you want let's go down now we're down to the options trading window which will look pretty similar to the Mosaic but they just have a different configuration here. I don't know what that message was. So here you have once again a number of windows and let's see I'm sorry that's Mosaic let's go back to the option this is the options trading window. Now once again you have a number of windows here you can sell if it looks much more technologically savvy compared to the classic TWS that I like to use. So right up here at the top is a option chain just for Apple, okay? So you can type in any stock you want here I got a couple that defaulted from before but we're looking at Apple and once again here's the option chain let's go down to the move myself here for a second. Let's go down to the 100 puts right here strike once again click on the bid to initiate a sell order click on that and now it comes down to this box which is the order window. Same thing you got this little bar down here it's the you're selling the May 100 put it tells you the price right here doesn't show you the actual name let's see here. Well anyway so we're gonna set a limit price a 28 cents once again there is a drop down on the submit box so we check margin impact even if you hit submit it's gonna bring up the margin window once again the same window okay so you're starting to get see the pattern here before you execute the trade it's gonna show you what's about to happen so we looked at this a number of times we don't have to see we're gonna close this out. So there you go this is the options trading tab this is the mosaic window where you can create multiple other windows and going back to the classic TWS the old school format that I like to follow it looks like the old MS-DOS type of windows that's just me I'm too old at this point it's hard for me to make changes like that so once again here's the April 100 put so we can track this thing during the day and if I need to sell it you know I can always click on it and it creates the order and right click here and click discard okay so there's your four ways your four ways to create a sell put order window at interactive brokers once again the two screens that I like to use I like to use the classic TWS and the big option chain here where you can put in lots of different stocks that's what I like to use okay so I told you earlier that I'm going to show you a list of brokers list of potential brokers on our website that you can look for so if you go back to our website smartoptionseller.com click on the FAQs which stands for frequently asked questions if you scroll all the way down towards the bottom we have a list of brokers here that you can look at yourself and go to their websites and see their prices and see what their platforms look like interactive brokers, trader, tastyworks, thinkorswim, Charles Schwab, trade station and eTrade those are just some of the brokers that we feel are popular today and that are trustworthy okay we don't make any claims for them you can decide on your own all right so that's on our website as well and so that should about do it it's very simple selling put options at interactive brokers now if you use a different broker I have to believe that the entry order is pretty similar you open up the option chain you click on the bid price and it'll set up the sell order for you okay if you want to get out of the trade at any time and buy an option back or if you want to buy an option you just click on the offer price or the ask price and it'll set up a buy order it's just doing in reverse what I showed you okay so that's it I hope this information has been helpful if you like this video please give me a thumbs up and please hit that red subscribe button in the bottom right hand corner of the video it helps YouTube push out this video to other people that may be interested in learning how to sell put options all right that is all for me today don't forget to download or sign up for the free put selling basics ebook I hope everyone has a great trading week and a great weekend and I'll see you all next weekend this is Lee Lowell signing off