Why And When
Buying Calls You buy calls (short and long term) when you think a stock (hence the option value) will increase within a certain time period. You do so to lock in a certain price for the stock or to...
View ArticleGoing Short
Up until now we have been discussing selling uncovered puts. We don’t have a position in the underlying stock (as in writing covered calls). If you wanted to sell covered puts, you could, now or later,...
View ArticleStock High— Coming Down
Sell Call—Buy Put Sell the call for $1.50 ($1,500 if you purchased ten contracts) buy the put for 25tf. Capitalize on each—depending on the time left before expiration—at the optimum time. Buy back...
View ArticleProfit At Selling Puts
Damage Control You can’t say that you have unlimited risk in selling puts because the lowest the stock can go is to zero. That is your downside. If the stock is below the strike price, it will get put...
View ArticleCash Requirements
The only true hang-up to selling puts is that your broker will require cash on hand (in the money market part of your account) to cover your obligation. If you have a margin account, you’ll need to...
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