Collecting Rent -- VZ Oct 11 60/57 Bull Put

Yesterday I was speaking with a cousin of mine on the phone, in the middle of our lively conversation he noticed I was clearly distracted when I said out loud “O, wow!”, my reaction was to the discovery of some good option trading opportunities. He then asked me what I was doing, keep in mind that my cousin is not what you would call financial savvy, but I do not want to come across as a d*ck so I did my best to explain to him the gist of options trading, avoiding the multitude of options strategies, I have a hard enough time understanding the greeks so there was no way I was going to cover that with him.

So I began to explain to my cousin that options are a derivative of a stock, he quickly replied back with… “like a stock option?” I gave him the metaphor of renting an apartment, he can pay me the rent at the end of the month which I will collect (Premium) and if the going price of the apartment reaches a specific price point, he has the option to buy the apartment at that designated price. I’m not sure how well that metaphor explained options premium, how would you explain it?

VZ Oct 11 60/57 Bull Put has a 53% of being profitable, as I slowly began to fund my portfolio, VZ is one of my long position that I am using options to create a steady income. I am bullish on VZ, if price falls below 58, I will be selling calls against it. I will be posting the results in the next few weeks of how well this position/strategy performs.