If you want to sell cash secured puts, but are not allowed to, you can do the exact equivalent.
That being, initiate a buy/write strategy.
That being, you buy the stock at the strike you desire, and write the equivalent credit you desire.
Just like selling a put, you pick the strike and credit you desire.
If the strike and credit don't get filled together, the trade is not initiated.
However, instead of collecting a credit, you initiate a buy/write as a debit.... but it's the equivalent of getting a credit.
For example,... a stock is trading at $23, and you would normally sell a $20 put for a credit of $0.40.
Instead, you intiate a buy/write.
That being you buy the stock at the equivalent of $20 and at the exact same time, you sell a covered call for the equivalent of that $0.40 credit.
However, the credit is set up as a debit via this strategy.
Ask your broker to walk you throught it, and how to set it up.
Example,.... If i want the equivalent credit of $0.40 as I'd collect via a put,
I would write the order as a debit of $19.60.
That being 20 - the desired credit of $0.40...= 19.60
It is the exact same thing as selling a cash secured put, but it's easier to get approval.
If you are approved to sell covered calls, you are approved to impliment a buy/write strategy.
The only downside is, because you are buying a stock and earning the credit (debit) at the exact same time, those 2 things have to line up at the exact same time.
Thus it can be a little more difficult to get fills than simply selling a put.
But it is the exact same thing as selling a put.
You get to pick the strike and the equivalent credit.
You just look at what the the equivalent put is paying for that strike, and you list it as a debit, as in the example i showed you above.
That being, the stock is trading at 28, the put strike you desire is 25, the credit you desire is $0.80,.... you select the same $25 strike and enter the order as a DEBIT of $24.20.
That being 25 - the equivalent credit of $0.80 = 24.20 debit.
Thus, you are buying the stock at a specific price and selling the equivalent covered call.
If the stock is above your desired strike on expy, the trade is over.
You keep the credit.
just like selling a put.
If the stock is below your selected strike, you bought the stock at your strike minus your credit.
That being, at your debit price..... per the 2 examples above.
That being, initiate a buy/write strategy.
That being, you buy the stock at the strike you desire, and write the equivalent credit you desire.
Just like selling a put, you pick the strike and credit you desire.
If the strike and credit don't get filled together, the trade is not initiated.
However, instead of collecting a credit, you initiate a buy/write as a debit.... but it's the equivalent of getting a credit.
For example,... a stock is trading at $23, and you would normally sell a $20 put for a credit of $0.40.
Instead, you intiate a buy/write.
That being you buy the stock at the equivalent of $20 and at the exact same time, you sell a covered call for the equivalent of that $0.40 credit.
However, the credit is set up as a debit via this strategy.
Ask your broker to walk you throught it, and how to set it up.
Example,.... If i want the equivalent credit of $0.40 as I'd collect via a put,
I would write the order as a debit of $19.60.
That being 20 - the desired credit of $0.40...= 19.60
It is the exact same thing as selling a cash secured put, but it's easier to get approval.
If you are approved to sell covered calls, you are approved to impliment a buy/write strategy.
The only downside is, because you are buying a stock and earning the credit (debit) at the exact same time, those 2 things have to line up at the exact same time.
Thus it can be a little more difficult to get fills than simply selling a put.
But it is the exact same thing as selling a put.
You get to pick the strike and the equivalent credit.
You just look at what the the equivalent put is paying for that strike, and you list it as a debit, as in the example i showed you above.
That being, the stock is trading at 28, the put strike you desire is 25, the credit you desire is $0.80,.... you select the same $25 strike and enter the order as a DEBIT of $24.20.
That being 25 - the equivalent credit of $0.80 = 24.20 debit.
Thus, you are buying the stock at a specific price and selling the equivalent covered call.
If the stock is above your desired strike on expy, the trade is over.
You keep the credit.
just like selling a put.
If the stock is below your selected strike, you bought the stock at your strike minus your credit.
That being, at your debit price..... per the 2 examples above.
