what's up this is Bryan hildreth and
today I'm going to show you the fastest
way that I personally make passive
income in the stock market now as a
disclaimer I'm going to tell you that
you shouldn't make any investment that
you don't understand you should always
do your research and make investments
based off your own assumptions but I'm
going to show you step by step how I
personally make these trades using
options fundamentals and technical
aspects on a trade that I recently made
$640 on in three days we traded the
stock face book so I'm going to show you
how I did so on my computer right now
alright so as you can see here on my
computer screen
I bought two face book calls and I
of this trade because I made 30% on my
money in 3 days my goal is to always if
I make 20 more than 25% in under three
days on any options trade I always close
it that's just my that's my habit it's
my strategy I never get greedy when it
comes to this could I have made a
hundred percent yes but I would have to
be holding these calls into Facebook
earnings as you know Facebook did really
well in earnings the stock jumped up to
170 obviously I didn't participate in
that but the reason I did that was
because you know I have a strategy I'm
not going to get greedy and I made my
thirty percent in three days so I'm
going to show you step-by-step how to do
so how I did it and how you can
implement some of these strategies mind
you this is all speculation I recommend
you read books you gain knowledge on
this before you jump into trading you
know get some training read one up on
Wall Street by Peter Lynch some of the
topics that I'm going to talk about in
this video pertain to this book such as
p/e ratio okay
this book helps you understand the
fundamentals of the stock market helps
you understand companies
and the reason why I believe in Facebook
is because I'm a facebook advertiser and
I know that there's 50 million
businesses on Facebook and only 2
million are actually spending money on
advertising and I know that number is
exponentially growing so what does that
mean
Facebook earnings are going to grow the
stock market goes up and it has always
gone up obviously we've had bear markets
we've had recessions but the stock
market is that the highest has ever been
because corporate earnings drives the
stock market higher ok when when there's
more consumers there's more people in
the world buying crap and different
products and stuff from companies
corporate earnings go higher right and
then those those companies get more
money from investors to produce more
crap to sell to people and then
corporate earnings grow and grow and
grow so that's just a basic of why the
stock market tends to always go up even
though there are bear markets there are
recessions there are pull backs in
certain companies there's companies that
go out of business
stock goes to zero but the overall
market has always gone up if you've seen
for the past over a hundred years to
give you a little background about
myself for those of you that don't know
me I've worked at an investment bank for
about three years before I quit
I studied and traded in the stock market
for about five years so that's why I
like the stock market it's just been my
passion and hobby and that's why I teach
people how to utilize it to make some
income so let's jump into the trade what
did I do to make six hundred forty two
dollars and three days this is very
doable
thirty percent gains in three days now
if you do this week after week after
week after week your investment your
trading profits compound and then you're
able to trade with more money and make a
passive full-time income so I'm going to
show you how I did this with Facebook
now call options are leverage products
it gives you the right to buy or sell
100 shares of the underlying asset
therefore I'm sure eight it's like
trading a hundred shares of stock okay
that's a very basic way of putting it
obviously there's a lot of factors that
go into that like
Delta and theta and Vega stuff like that
that you probably don't understand but
I'm just going to kind of keep this as
basic as possible okay so let's go ahead
and look at Facebook what was Facebook
doing for the past you know I mean for
the his history of Facebook being on the
stock market the stock exchange this
stock has done nothing but upwards and
as you see the stock literally has just
gone up and up and up and then as this
recent earnings came about we've had
some major trajectory upwards okay so
why do i trade facebook and why have I
never lost money on Facebook I've only
made money it's because number one I
study this stock on a fundamental level
p/e ratio meaning price divided by
earnings Facebook's earnings are always
positive and they're always going up and
as a tech company that's really rare to
find there's only a few out there like
Apple I mean even apples or earnings
haven't been as great you know Google
has been great but there's a lot of
stocks that have really high p/e ratios
and what this means is a multiple that
you're willing to pay for the stock so
for Amazon their p/e ratio is like 215
meaning you're paying 215 times what
they actually earn per share to own that
stock so there's a lot more risk
involved Facebook has a p/e ratio of 43
right now right so investors are paying
43 times what they actually make but how
does this apply to trading okay well
when I look at the stock every time that
you know every time they report earnings
their earnings are exponentially higher
but the p/e ratio goes lower that means
you know there's not a lot of you know
over hype in this stock meaning
investors aren't just like buying it
just because they're you know they're
investing reasonably because Facebook
has higher earnings but this stock is
not inflated by any means that means you
know it's good to trade you know that
there's not going to be
like some you know big risk in it like
snapchat for instance because snapchat
has zero earnings they have negative
earnings they don't even earn money but
people are buying this stock like crazy
right when snapchat IPO people bought
the stock like crazy they don't even
have earnings you know what I mean so I
don't trade stocks like that
I believe in Facebook I'm a facebook
advertiser so I know the company and
Peter Lynch talks about that in the book
so I just prefer Facebook I prefer to
trade this stock okay now when it comes
to options how do we determine getting
in an options trade well I like to if
you're going to buy options which I
rarely do I just did on this one
instance is because the implied
volatility was low and what that means
is the options are priced they're priced
lower right because less people are are
buying puts they're you know less people
are hedging their positions and when
volatility is lower you're able to buy
options at a cheaper price okay so the
Ivy was around 13 and if you look at the
52-week historical volatility is between
7% and 30% and it was around 13 so if
you look at the chart
I bought the options when the stock was
just kind of trading sideways okay and
when that happens volatility goes down a
lot and the options become less
expensive so they're better to buy
rather than self so I bought it in here
I bought the option when the stock was
at 1:53 okay and I sold the option when
the stock hit 160 and if you look at the
options I'll show you which one I bought
okay I went out to January 18 these are
longer-term options okay
these ones have a longer term expiration
meaning they don't lose value as fast
okay they don't lose intrinsic value as
fast as you know the weekly options or
closer monthly options would so if we if
we go back to the let's uncheck these
okay so if we look at the option that I
purchased
you know I purchased this thing for like
I think it was ten point zero eight so I
paid like $1,000 per option now they're
worth two thousand two hundred eighty
dollars okay so this option doubled in
price now if I kept this option I would
have doubled my money but I didn't get
greedy
I took the profit and I got out of the
trade I own the stock so it's totally
fine but so this is this is kind of how
we did things and the reason you want to
look at p/e ratio and understand that is
because fundamentals play a key factor
as well you know there's traders out
there that you know look at solely
technical but I look at fundamentals on
certain stocks especially Facebook now
this was an easy trade to do all's I did
was I waited for volatility to come down
I waited for the stock to trade sideways
and I purchased based on those
fundamentals like the p/e ratio now I'm
going to link down a video below where I
talk about the p/e ratio in some of my
older investing videos you should
definitely watch that because this is
you know if you can get into trading and
understanding the market it's a good way
for passive income or it's a good way to
make quick income like this one like
this trade that I just did so make sure
to LIKE and subscribe to the channel if
you enjoyed this video leave a comment
I'll definitely do more of these videos
if you want to hear more about the stock
market and take care
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