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Chad Shoop
Pure Income

Your Frequently Asked Questions

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Your Frequently Asked Questions

By now, we’ve covered everything you need to know to be successful with Pure Income and start generating extra income.

I hope you’ve had time to watch my Power Options videos and to read through my reports on the Getting Started page.

That’s why I think now is the perfect moment to address any questions you might have.

So let’s get right into it.

Below, you can find some of the frequent questions new members have asked me over the years and my answers. Remember, if you want to know something that is not answered in these resources, you can always contact my team and me at

Pure Income FAQs

Question: Do I have to open an options account?

My Answer: Yes, but it’s easy. You will usually have your account set up in as little as one business day. And it typically doesn’t take any longer than a few days. For those of you who already have a brokerage account and just need to request permission, you may hear back from your broker in as little as one day.

You also have to request permission to sell options before making your first trade. If you have any trouble getting approval for an options trading account, speak to your broker and inform them that you’re aware of the risks involved with selling options.

For more information, please read my Quick Start Guide here.

Question: What do I do if I can’t get approved for the options level you mention?

My Answer: This is no problem at all. Your broker may be suspect at first, but they just want to make sure they cover all their bases. My advice is simply to work with them. You can follow me for a few weeks, read all my alerts and study all the online resources. Then go back to your broker, and they shouldn’t have a problem giving you an access level that allows you to follow this service.

Keep in mind, all you need to be able to follow every income trade I recommend in Pure Income is a very low level of options access (depending on your broker). As long as your account allows you to sell to open cash-secured, or covered, put options and call options, you can place every single trade.

And if you wish to use margin, that will require a higher level of account access. Sometimes your broker may want you to trade under a cash-secured account for a while to start, but down the road — typically just a few months — they should be willing to open your account up to margin.

Question: What risk tolerance is needed for Pure Income?

My Answer: Pure Income is designed for the risk-averse investor — the trader who is looking to steadily grow capital with minimal risk. We haven’t closed a position for a loss in a year.

As far as the risks associated with selling puts, you risk owning shares of the stock, so your risk is simply owning shares of the company. The only difference is that when you sell puts, you collect “instant cash” — the dividend premium — and your strike is usually below the current price. That gives you a bit of a cushion versus buying the stock outright.

But that’s why it is so important to only execute this approach on stocks that you already want to own. Then, by selling puts on those stocks, you create a lucrative strategy.

Question: As a new member to Pure Income, which trades should I get started with?

My Answer: I advise all readers to only jump into new trades. I never recommend getting into past trades, as the strike price and other info I provide will not reflect how I would trade the option now. We tend to hold our Pure Income positions for 90 days or more, which means that the time value for past trades will have long since passed. You would not be able to generate the same profit readers took on past trades. I also advise readers to be careful of entering past trades because they could yield steep losses in your portfolio. In general, you should wait for my trade alerts to tell you when to enter a position. I typically send a new trade nearly every couple times a month on Wednesdays.

Question: How many options contracts should I sell?

My Answer: That boils down to how much capital you feel comfortable investing in each position. The key thing to keep in mind here is that one contract represents 100 shares. You should NEVER sell puts on more shares than you’re willing to buy. If you’re comfortable owning 100 shares, sell one contract. If you’re comfortable owning 500 shares, sell five contracts.

So, make sure you keep position sizing in mind.

Take a look at the example Capital Requirements chart below. It demonstrates how quickly your requirements can change.


You Collect Capital Required in a Cash-Secured Account Capital Required in a Margin Account
If You Sell One Contract: $160 $4,000 $800
If You Sell Five Contracts: $800 $20,000 $4,000
If You Sell 10 Contracts: $1,600 $40,000 $8,000


In this example, we are collecting $1.60 per share. Remember that options trade by contracts, and one contract represents 100 shares of stock. So if we sold one contract, we would collect $160. In a cash-secured account, this would tie up $4,000 — the same amount you would need if you were put shares of the stock. If you made the trade in a margin account, you would need roughly $800, depending on your broker’s margin limits.

In the chart, you can see how quickly this requirement increases. The bottom line is that you never want to have more capital tied up in the cash-secured account than you are willing to risk in one trade.

Question: What other income strategies will you use in Pure Income?

My Answer: Aside from selling puts and covered calls, I might occasionally recommend unique methods to collect income, such as making a collar trade. Don’t worry; I’ll always explain the reasoning and the steps for any unique trades within the email alert.

Given how volatile the markets can be, I’ve also devised a strategy for selling naked calls in case we see more bearish market movement. You can check out our bear market plan right here.

Again, these are just a small sample of the inquiries I’ve received. But I hope I answered some questions that might have come up while you were familiarizing yourself with my service.

And keep in mind that I always enjoy hearing from you, so please feel free to reach out to my team and me anytime at

Tomorrow, we’ll wrap up the Pure Income Getting Started series with your chance to give me feedback by taking a brief survey. It’s a great way for me to understand how much the series has helped you, so I hope you’ll take a few minutes to answer my questions.


Chad Shoop
Editor, Pure Income

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