This document discusses passive income strategies using options on the S&P 500 index. It provides an overview of options, including how they are priced and can provide leverage compared to stock trading. The strategy presented is a non-directional "iron condor" trade that aims to profit from the index staying within a defined range over a 25-day period, with an expected return of 8% every 25 days while limiting risk. Transaction costs, subscription fees, and account requirements are also outlined.

1. Passive Income Strategies for your
Financial Freedom
The Credit Spreads Options Strategy
www.slideshare.net/ppis/

2. Disclaimer
This is a presentation prepared for Education purposes only.
Neither Prosperis Passive Income Strategies (PPIS) nor any of its personnel are
registered broker-dealers or investment advisors. We may mention that we consider
certain securities or positions to be good candidates for the types of strategies we are
discussing or illustrating. Because we consider the securities or positions appropriate to
the discussion or for illustration purposes does not mean that we are telling you to trade
these exact strategies or securities. Keep in mind that we are not providing you with any
specific recommendations or personalized advice about your own trading activities. The
information we are providing is not tailored to any particular individual. Any mention of
a particular security is not a recommendation to buy, sell, or hold that or any other
security, or a suggestion that it is suitable for any specific person. Keep in mind that all
trading ALWAYS involves a risk of loss, even if we are discussing strategies that are
intended to limit risk.
Also PPIS personnel are not subject to trading restrictions. Myself and any others at PPIS
could have a position in a security or initiate a position in a security at any time.

3. Purpose
To help people and businesses achieve financial freedom.
Vision
To have a community in which individuals possess the resources and knowledge on how to earn
passive income by leveraging their owns resources and that of successful organizations.
Core Values
Delivering Value - Being generous with our knowledge.
Transparency – Communicating risks and limitations.
Passion - About winning for you.
Empowerment - Control your finances through education.
Excellence - In everything we do.
Integrity - Never compromising on the truth.
Leverage - Gain advantages from the
resources we possess.

4. Stock Market Basics
A share is a part ownership of a company.
A stock is a collection of shares.
A stock index is the average of a group of stocks.
An investor or trader can be:
Bullish
Bearish
or Neutral.

5. What are Options?
An option is a contract that to buy or sell
a certain amount of stock.
allows you
For this program, we will trade options on a stock
index called the S&P 500 which has the symbol SPX.
RIGHT or OBLIGATION

6. Why do Options exist? Why should we trade them?
Leverage.
1 option contract controls 100 shares.
Bullish Stock Trader
Apple Inc. (AAPL) costs $100.00/share
100 shares would cost = $10,000.
Apple Inc. share goes to $105.00/share
Stock Trader makes $500 or 5% profit.
Bullish Options Trader
Apple Inc. (AAPL) costs $100.00/share
1 contract costs $5.00, so trader pays $500.
Apple Inc. share goes to $105.00/share
The Option contract goes to $6.80.
Options Trader makes $180 or 36% profit.

7. Types of Options contracts
CALL
PUT
What we can do with Options contracts
BUY
SELL
When you buy, you have a RIGHT.
When you sell you have an OBLIGATION.

8. More Differences Between Shares and Options
The Options Contract is only valid until a specified date.
This is the expiration date.
While the share has a price, the options contract has a premium:

9. +
How are Options Priced?
TIME VALUE
INTRINSIC VALUE
An option’s premium has two components:

10. The Guarantee with Options – Time will Decay
SELL
BUY
BACK
$$$

11. Equity Options
Strategy A
Strategy B
Strategy C
Strategy D
Strategy E
Strategy F
Strategy G
Strategy H
Strategy I
IRON CONDOR

12. NON-DIRECTIONAL TRADES
RANGE-BOUND
INDEX-LINKED
25-DAY TRADE
TIME DECAY IS GUARANTEED

13. $0

14. SPX (S&P 500)
UPPER-RANGE:
> 2270
2150 22702030
LOWER-RANGE:
< 2030
95%

15. But how much would I make? …
• 8% Return Every 25 days, 95% of the time
• 5% of the time the trade will need adjustment
• US $
• Cannot be done in a registered account
(TFSA or RRSP)
• Margin Account from a Brokerage
(Minimum required = $5,000)
• Practice for Free – Paper Trading with Brokerage

16. Number crunching…
How many 25-day periods in a year? 365 / 25 = 14
$5,000 would make 8% x $5,000 = $400 each 25-day period
The index will jump outside the range = 2 times/yr resulting in $0.
Therefore, 14 – 2 =
12 times, you will make $400, converting:
$5,000 $9,800
In 1 year!

17. Costs
1) Transaction fees depend on the broker
For example,
TD’s Think or Swim (ToS) is $25 per 25 day trade of $5K.
2) Subscription fee to recommendation site:
www.covalcondor.com
= $69/ month. Two-week trial is free.

18. WWW. .COM
• SPX Recommendation Every Day based on Daily Activity
and Back-tested Research.
• Subscribe to Daily Email with the Trade Risk # of the trade
you placed.
• Check your Trade on the dial on the site:

19. Course offered on November 22, 2016
• $200
BONUSES
• Bring another person for half-price
• Combine with November 8, 2016 for $250
• 10% off full price by registering TODAY
$100 (2016 FRIENDS AND FAMILY RATE)
$125

20. To The Third Group …
NO TIME
NO INCLINATION TO LEARN
NO MONEY
NO _________________

22. Backup Slides

23. How much does the SPX Change on a Daily Basis?

24. SELLBUY
CALL PUT
THE RIGHT TO: THE RIGHT TO:
THE OBLIGATION TO: THE OBLIGATION TO:
Buy Stock Sell Stock
Sell Stock Buy Stock