Selling Put Options For A Living

An exercise in selling puts.

Selling put options for a living.

With the goal of living off dividends i can increase my income and reinvestable capital by successfully writing put options for income. Short puts may be used as an alternative to placing buy limit orders. Writing puts for income offers the best combination of risk reward. I ll highlight why selling weekly put options is the best weekly option trading strategy to learn.

Spo yhoo150130p49 1 68. I do not recommend that traders buy a put or a call option. A quick primer on options may be helpful in understanding how writing selling puts can benefit your investment strategy so let s examine a typical trading. Buy 100 shares of yhoo 49.

It is best to sell puts and calls if you want to make a living by trading. Place a buy limit order. Trader wants to own 100 shares of yhoo if price goes down to 49. By selling the january 28 puts you can bring in approximately 1 06 or 106 per contract.

One of my favorite option strategies is a very simple trade that generates portfolio income and reduces equity risk it is selling a cash secured put. Sell a 49 strike put. Once my setup and hedging approx 3 of my capital with calendar spread is complete i start selling covered calls on assigned puts else sell puts for 6 months. Selling cash secured put options.

For example let s say you wanted to make a quick trade in vxx. First you re able to collect a large amount of option premium. In my last post i explained how selling put s can be used by the conservative investor to buy stocks at a lower price during almost any market conditions. Cost basis 49 if order is filled 49 option 2.

In this article i ll talk about how to either make a living or supplement your income by selling put s for a profit. I mostly sell out of the money vertical credit spread put options because it provides a substantial amount of protection. Selling a put obligates you to buy shares of a stock or etf at your chosen short strike if the put option is assigned. By selling put options.

Pitfalls of selling stock options like naked puts. Yhoo current market price 49 70. You can read that story to better understand how selling a put works.