When considering how to make $100,000 trading options we should go into it knowing, it won’t be easy. But neither is anything truly good so the difficulty makes it all worth it in the end.

With that out of the way I’ll get straight into the explanation, and what you’ll need to accomplish such a feat. Before we begin, probably couldn’t hurt to brush up on the Characteristics & Risks of Standardized Options. Moreover, you should also know, I’m not advocating you attempt this strategy. Just food for thought.

Strategy to Earn $100,000 Trading Options

Buy Blue Chip Dividend Stocks & Sell Covered Calls

While the title of this post makes earning 100K sound like mere child’s play, it really isn’t. At least not from this side of that first $100k. Once completed our outlook will be immeasurably different. However, don’t allow yourself to wander off course dreaming of sunsets on your mega yacht just yet. To complete the endeavor you’ll need to get started immediately and stay consistent. I’m not talking about consistency for a few weeks, I’m talking about sometimes gut wrenching or nerve wracking, pain in the backside, boring, unexciting, run of the mill, same old same, years of consistency. If you can do it without wavering, earning $100,000 trading options may not be that difficult after all.

The reality however, we(myself included) rarely stick with any one thing long enough to reap the rewards. The bible says it this way, “you’ll reap what you sow”. In order to do any reaping we must start sowing, then continue sowing… and sowing… and sowing, until its time to reap the harvest. It wouldn’t do us much good to sow for a few days and reap only a few dollars. We need a plentiful harvest.

Now just a quick break to dream about that yacht…

How to make $100,000 trading options luxury yacht
Is it possible?

Ok, back to it then…

Blue Chip Dividend Stocks & Covered Calls

To determine what stock or stocks is preferred, the S&P 100 is generally a good place to start. Typically, these stocks are common household names with deep liquidity and branding power. Making them a perfect fit to deploy such a strategy. For the sake of this article, I’m going to use the following 5 companies; Bank of America (BAC), Dow Inc. (DOW), Kraft Heinz Co. (KHC), Coca-Cola Co. (KO), & Pfizer Inc. (PFE). Currently, they all provide at around 3% in dividends annually and support liquid options markets. Moreover, they all trade under $100 dollars per share, which makes them more or less affordable to get started.

I’m going to proceed as if I’ve saved $5,000 and will contribute $250 per month, or $600 per year to each investment. Both of which I think are possible for the average person looking to invest.

How to make $100,000 trading options? Through capital appreciation, dividends, & options income.

Capital Appreciation

Over the past 5 years we’ve witnessed a major market correction in Covid-19, and we’re currently experiencing recession level pullbacks in virtually all equities. Still, all things considered, these 5 companies have managed to hum along (and pay those dividends). This is exactly what I’m look for in a company to perform this particular strategy.

5 Year Capital Appreciation
BACDOWKHCKOPFE
5 Year Return45%-16.3%-59%40%72%
Average 1 Year Return9%-3.26%-11.8%8%14.4%
Total Return & Average Yearly Return

Going forward, let’s assume we maintain an equal weight of each company throughout this process with freedom to rebalance as capital becomes available. That said, I’m going to skip the triviality of making up future stock prices to simulate the rebalancing and I’ll simply proceed into the future at the yearly return listed above.

$5000/5 = $1000 Investment into each equity

Initial Investment
BACDOWKHCKOPFE
# Shares3120261619
Share Price$32.25$49.55$38.01$62.50$51.75
Sub Total$999.75$991.00$988.26$1000.00$983.25
Initial Shares Per Company

As time passes, we’ll receive dividends, earn options income, and provide contributions to take advantage of compounded returns. Let’s diverge to discuss dividend income, then options income, before circling back to view the total growth.

Dividend Income

Dividends are far and away the easiest way to earn passive income. We literally have to do nothing and this income is received each and every quarter(or monthly). While there is always a risk that a dividend could be cut we chose these companies for their survivability and there dividend more so than anything else. Should one cut the dividend or turbulent news be released, I would drop them in favor of another similar company at any time.

BACDOWKHCKOPFE
Dividend Per Share$.84$2.80$1.60$1.76$1.60
Yearly Dividend Per Share

Options Income

Options income will provide the possibility for extreme growth the last few years each investment. To begin, we wouldn’t have enough shares to sell covered calls so we’ll have to maintain our consistent behavior until acquiring at least 100 shares.

The following table will be a gross generalization of the amount of premium we could reasonably collect on a yearly basis. Please note that you could also elect to use monthly or even weekly options. This may boost returns but could also mean constant movement of shares or options and in general, make this strategy more difficult.

I should also point out that I would never want to sell a call beneath my cost basis. It would be impossible to accurately simulate that for the purposes of this post but there may be periods where no options income exists. During those periods I would simply be looking to average down my cost basis.

BACDOWKHCKOPFE
Possible Yearly Options Income Per 100 shares$600$1200$440$800$1000
Yearly Options Income

How to make $100,000 Trading Options – Full Breakdown

Bank of America

YearSharesShare PriceValueDividend IncomeOptions IncomeContributionCapital IncreaseRemaining Balance
202231$32.25$999.75$26.04$0$600$626.04$37.74
202349$35.15$1722.47$41.16$0$600$641.16$31.03
202466$38.32$2528.87$55.44$0$600$655.44$20.82
202582$41.76$3424.70$68.88$0$600$668.88$8.02
202696$45.52$4370.26$80.64$600$600$1280.64$39.58
2027122$49.62$6053.72$102.48$600$600$1302.48$30.08
2028146$54.09$7896.63$122.64$600$600$1322.64$34.48
2029169$58.95$9963.27$141.96$600$600$1341.96$1.18
2030189$64.26$12145.17$158.76$600$600$1358.76$57.93
2031209$70.04$14639.10$175.56$1200$600$1975.56$15.82
2032235$76.35$17941.65$197.40$1200$600$1997.40$6.35
Bank Of America Growth Detail

Total in 2032 is $19,945.40. Thus, approximately 1/5th of our $100k goal.

Assumptions

I operated as if the dividend didn’t increase at all throughout the period and that isn’t actually likely. I also assumed that Bank of America and the companies below grew(declined) at the rates above year over year which certainly will not happen. However, without a crystal ball or the ability to time travel there would be no way to know where Bank of America(or any company) will trade in the future.

Additionally, I assumed we were able to find enough money in 2026 to buy 4 more shares to start collecting option premiums. You may also notice the $37.74 remaining balance at the top right. That amount is the difference remaining after making our initial investment into every company.

This example also doesn’t account for buying while shares are low. Should an investor only buy shares after a decline, it’s not impossible to think a desired return could be achieved even faster. Further, I don’t know that I believe Bank of America will be trading at $76 dollars per share in 2032. They certainly could, but should they fail to, it would mean potentially more shares, more dividends, and more options premiums. All of which are good from my perspective.

Lastly, this and the following examples assume we never have shares called away but we most certainly will. Therefore, it doesn’t consider tax implications of buying immediately back into the company after having them called away.

Dow Inc.

YearSharesShare PriceValueDividend IncomeOptions IncomeContributionCapital IncreaseRemaining Balance
202220$49.55$991$56$0$600$656$0
202333$47.93$1581.84$92.40$0$600$692.40$32.85
202448$46.37$2225.86$134.40$0$600$734.40$29.67
202565$44.86$2915.92$182$0$600$782$1.44
202683$43.40$3602.02$232.40$0$600$832.40$2.28
2027102$41.98$4282.27$285.60$1200$600$2085.60$37.01
2028154$40.61$6254.62$431.20$1200$600$2231.20$10.66
2029211$39.29$8290.27$590.80$2400$600$3590.80$2.30
2030305$38.01$11592.90$854$3600$600$5054$20.21
2031442$36.77$16252.52$1237.60$4800$600$6637.60$36.65
2032629$35.57$22374.59$1761.20$7200$600$9561.20$22.36
Dow Growth Detail

Total in 2032 is $31,958.15. Well above the 1/5th goal.

Assumptions

Shocking right? The difference here was that over time with the share price falling we were able to purchase increasingly more shares. Thus, receive more dividend payments and options premiums. More than making up for the share price decline. For this example, I elected to continue contributions until 2032 but in reality that money would have been shifted to another investment. Doing so would have allowed us to reach our goal of $100k even faster.

Kraft Heinz Co.

YearSharesShare PriceValueDividend IncomeOptions IncomeContributionCapital IncreaseRemaining Balance
202226$38.01$988.26$41.60$0$600$641.60$0
202345$33.52$1508.62$72$0$600$672$4.63
202467$29.57$1981.12$107.20$0$600$707.20$26.11
202595$26.08$2477.58$152$0$600$752$3.08
2026127$23$2921.30$203.20$440$600$1243.20$19
2027189$20.29$3834.45$302.40$440$600$1342.40$4.34
2028264$17.89$4724.04$422.40$880$600$1902.40$4.69
2029384$15.78$6060.51$614.40$1320$600$2534.40$13.18
2030567$13.92$7892.77$907.20$2200$600$3707.20$.18
2031868$12.28$10657$1388.80$3520$600$5508.80$11.8
20321377$10.83$14911.37$2203.20$5720$600$8523.20$8.70
Kraft Heinz Growth Detail

Total in 2032 is $23,443.28. Above the goal of 1/5th of $100K.

Assumptions

No new assumptions to report. Again though, shifting the contribution to another investment in the final few years would make sense, but that would come down to preference or need.

Coca-Cola Co.

YearSharesShare PriceValueDividend IncomeOptions IncomeContributionCapital IncreaseRemaining Balance
202216$62.50$1000$28.16$0$600$628.16$0
202325$67.50$1687.50$44$0$600$644$20.66
202434$72.90$2478.60$59.84$0$600$659.84$8.56
202542$78.73$3306.74$73.92$0$600$673.92$38.54
202650$85.03$4251.53$88$0$600$688$32.22
202757$91.83$5234.48$100.32$0$600$700.32$77.39
202864$99.18$6347.50$112.64$0$600$712.64$83.45
202971$107.11$7605.10$124.96$0$600$724.96$46.29
203077$115.68$8907.60$135.52$0$600$735.52$77.15
203183$124.94$10369.84$146.08$0$600$746.08$63.05
203288$134.93$11874.09$154.88$0$600$754.88$134.46
Coca-Cola Growth Detail

Total in 2032 is $12,763.43. Thus, under our goal of 1/5th of $100k.

Assumptions

If you’re curious where those contributions from other investments should be going, this is it. During the period we were unable to take advantage of accelerating growth with options premiums. That said, Coca-cola is one of those companies that most hold for a lifetime so I guess in time that will correct itself. We’re not stopping at just $100k are we?

Pfizer Inc.

YearSharesShare PriceValueDividend IncomeOptions IncomeContributionCapital IncreaseRemaining Balance
202219$51.75$983.25$30.40$0$600$630.40$0
202329$59$1710.86$46.40$0$600$646.40$40.45
202439$67.25$2622.92$62.40$0$600$662.40$14.31
202547$76.67$3603.49$75.20$0$600$675.20$63.35
202655$87.40$4807.20$88$0$600$688$39.32
202762$99.64$6177.69$99.20$0$600$699.20$29.84
202868$113.59$7724.11$108.80$0$600$708.80$47.50
202973$129.49$9452.95$116.80$0$600$716.80$108.84
203078$147.62$11514.47$124.80$0$600$724.80$87.53
203182$168.29$13799.64$131.20$0$600$731.20$139.18
203286$191.85$16498.99$137.60$0$600$737.60$102.98
Pfizer Growth Detail

Total in 2032 is $17,339.57. Just under our 1/5th goal.

Assumptions

No new assumptions to report. Similarly, this investment could have used some additional contributions along the way to get to the 100 share mark to receive options income. But again, that would come in time.

How to Make $100,000 Trading Options Closing thoughts

To close out this post on how to make $100,000 trading options, our total balance after the period is $105,449.83. Thus reaching our goal in how to make $100,000 trading options. Far from a get rich quick scheme, and to take us back to the start of this article, this approach will require a level of consistency and psychology that won’t be easy over such a long period. However, seeing it mapped out and knowing that share price declines could mean even more income from options and dividends makes weathering the storm just a little easier.

In my opinion, this is the easiest way to trade options and guarantee a goal is achieved. That said, it isn’t the only strategy that could be deployed. Afterall, they aren’t called “Options” for no reason.

God bless,

Jeff