Your Frequently Asked Questions

Your Frequently Asked Questions

Getting Started
Trading Manual
Income Accelerator Videos
Video: Options Tutorial

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

I hope you’ve had time to watch my Income Accelerator tutorials 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 subscribers have asked me over the years and my answers. If you haven’t already, feel free to read through my report, How to Make Money With Pure Income, for additional questions and answers. And remember, if you want to know something that is not answered in these resources, you can always contact me at

Pure Income FAQs

Question: Do I have to open an options account?

My Answer: Yes, but it’s easy, as you’ll see with my report, Unlocking Your Account. 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 report, Unlocking Your Account, 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. Remember, I asked my publisher to give you an extra month on us for a reason — I know it can take some time to get your account up and going. 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. Out of 26 trades that were closed in 2015, only one was for a loss — 10.57% to be exact — and as of this writing, our largest loss ever was 34%.

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 capital — 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 in a portfolio. Then, by selling puts on those stocks, you are creating a very lucrative strategy.

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 positioning size in mind.

That’s why I developed the Capital Requirements chart: It demonstrates how quickly your requirements can change.

Here is an example of the chart I send along with my recommendations:

In this example, we are collecting $1.45 per option. But remember that options trade by contracts, and one contract represents 100 shares of stock. So if we sold one contract, we would collect $145. In a cash-secured account, this would tie up $4,500 — 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 $900, 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 will sometimes have other unique options recommendations for collecting 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.

Recently, I’ve been recommending a strategy called “naked calls” to benefit from a possible downturn in the market. To read my detailed explanation of naked calls, click here.

Again, these are just a few 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 me any time 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