I have written the Sell Put Options methodology before, and the following video is one of my trade at AAPL.
When you Sell PUT Options, you need to ensure that your break-event point has strong support. During this volatile market, premium is rich and your risk is compensated. Your decision to pickup the strike price is important and by deducting with the premium, you will get your break-event point.
What is good about this strategy is that your win ratio is relatively high. You will win on 3 out of 4 probabilities. When the stock went up, stayed, and went down (a little bit), your trade will win. You will loose if the stock sold-off and went through your support (break-event point). But, as you believe on the stock and you want to buy it, think that you get the stock on discount.
The margin of Selling Naked Put is also friendlier that Covered Call strategy. Brokers only keep 20% from the strike price. Since it is only one leg options strategy, your commission is lower and less slippage. So, why searching for other strategy? Just search and scan stock that have good positive Relative Strength Index and fundamental and get the monthly income strategy.
Good Luck...
1 comment:
Hello,
Nice article ....
ValueYogaMat -
selling Manduka Yoga Mat, no 1 yoga mat from USA
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