One Hour is $3,732.56

Trading options can be an easy way to create income with very little time or effort. I recently wrote about an investment in SEZL (Sezzle Inc.) Since then there has been more activity.

This began with the purchase of 100 shares of SEZL on July 6 followed by some covered call options trades. It takes less than five minutes to buy shares, and each options trade takes about five minutes. On Monday (July 13) I bought another 100 shares at a lower price, bringing my average cost basis down to $169.83.

At the present time (pre-market) the shares are trading at about $184/share. If that continues, then all 200 shares will be called on August 21st. That will result in a profit, because one contract has a current price of $175 per share and the other one is at $180 per share.

The following image shows the purchases (A), the total cost for the shares and the total options income (1), and the average cost for the shares (2). On a per/share basis, the income received in eight days is $18.66. That is a current ROI of 11.0% (4), not counting any potential gain I might realize if my shares are called on August 21.

What is Sezzle and is it Worth the Risk?

SEZL is a “Transaction & Payment Processing Services” company in the Financial sector. It was founded in 2016, so it is a relative newcomer to the business world. Sezzle Inc. operates as a technology-enabled payments company in the United States and Canada. The company offers Sezzle Platform that provides a payments solution for consumers that extends credit at the point-of-sale allowing consumers to purchase and receive the ordered merchandise at the time of sale while paying in installments over time; Pay-in-Four, which allows consumers to pay a fourth of the purchase price up front and then another fourth of the purchase price every two weeks thereafter over a total of six weeks; Pay-in-Full that allows consumers to pay for the full value of their order up-front through the Sezzle Platform without the extension of credit; Pay-in-five which allows eligible consumers to pay a fifth of the purchase price up front, and then another four installments every two weeks; Pay-in-Two, which allow consumer to pay half of the value of their order up-front and the second half in two weeks; and other alternative installment options.

The following images are helpful in understanding why I purchased shares. Earnings and Revenue are projected to climb substantially. The QUANT rating is a STRONG BUY.

Probability is Key

When entering options orders, the probability that your shares will be called or that you will have to buy the shares for a cash-covered PUT contract is a crucial piece of the puzzle. Thankfully, although it is not a certainty, there are ways to get a sense as to the “risks” involved. I say “risks” because the risks tend to be very small and manageable.

OIC Probability Calculator Tool

The Options Industry Council (OIC) offers a nice tool called the Probability Calculator. “With the Probability Calculator, powered by iVolatility, simulate the probabilities of different outcomes based on the variables used and observable market data. Edit interest rates, choose different expirations, explore the impact of changes in volatility and more. Running the calculator will factor in all inputs over the time period selected and return the statistical probability that the underlying will finish above, below or between two target prices of your choosing. Note that all data for US stocks, options, dividends and interest rates are provided with a 20-minute delay.” – OIC

“OCC is providing this tool for educational purposes only. OCC makes no representation as to the timeliness, accuracy or validity of the information and this information should not be construed as a recommendation to purchase or sell a security, or to provide investment advice.“

I used this tool to examine my current SEZL contracts.

Probability for SEZL Prices

Only four data elements are needed to use the tool: 1) The ticker symbol: SEZL; 2) the P1, which is the price that SEZL might trade below (you pick the number,) I chose $175 because I have an option priced at $175; 3) the P2, or the price that SEZL might trade above. I chose $180 because I have an option priced at that dollar amount. 4) The expiration date of the contract you are considering. Then I clicked on CONFIRM (5).

Again, while this is not certain, the probabilities are relatively high that my shares with a covered call contract priced at $175 are currently (C) about 89.7%. If I don’t roll that contract, I can expect my shares to be called. I will receive $17,500 before the commission which will be a profit. The probability (B) that my $180/share contract will be called is low, but still higher than I would normally seek when doing an option contract. The current probability is almost 97%.

This is not bad news. Remember that I already made considerable income in just over one week. If the shares are called, I will receive $17,500 plus $18,000 or $35,500 for my shares on the third Friday in August. I paid about $33,965 for the shares, so the profit will be $35,500 less the $33,965.

YTD Options Income

In general, the amount of time I spend each week to trade options contracts is less than three hours. Total YTD options income is now at $105,736. That is worth the time spent. It works out to be about $3,750 of income per week.

This shows the annual comparisons of options income since I began trading options in 2020. 2026 may surpass 2026 if I continue to have success with the trades I do each week.

Recommendation: Options For Investing Doers

Don’t buy  SEZL if you don’t want to trade options contracts. It is better to avoid non-dividend investments unless you have more appetite for risk. Learn how to use the OIC Probability Calculator if you do trade options. Also, Seeking Alpha is a low-cost way to have access to good research and investing ideas.

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