Put spreads for income?

[El OchoCinco]

Hello all,

Last year I started selling cash secured puts and I've been surprisingly successful/lucky at it. However, the last two months I've had to buy some of these puts back at a loss as the underlying(s) had dropped below my break even point before expiration. So, I've been looking for some protection when the stock drops and I'm not on top of it quickly enough. I could set a stop loss order, but I was also considering various put spreads in which I would at least make up for some of the losses on the short side with the long side. So how would this be constructed, sell and buy for the same number of contracts, or use a different ratio of sold puts to bought puts? How far apart would you like the strikes to be? What about a calendar spread, buy the back month put and sell the front month perhaps, and use the same strike or different strikes? The object is to let the whole thing expire worthless, but certainly at times I won't mind being assigned either.

Thanks!

Just remember that selling puts in a strong bull market always looks like easy money until it corrects and goes the other way.

 

[kcgoogler]

You know, I've never understood this analogy.

Why is picking pennies up in front of a steam roller bad?

I mean, really. Shouldn't it be "trying to pick up pennies in front of a speeding train"?

Hahha.. because doesnt matter either ways once the main event is done.. You are a pancake.

 

[Overnight]

Hahha.. because doesnt matter either ways once the main event is done.. You are a pancake.


_______
Chaitanya Garikiparthi
Derivative Trader & Founder
www.siramcapital.com

But we do not have to be pancakes! Good lord, the steamroller is that video!

 

[ITM_Latino]

I consider myself a watch person, maybe a watch psychologist, I've been following them for some time.
All Rolex guys, both in movies and in real life, are basically a-holes. Patek Philippe guys are ego elitists, soft impotents. Audemars Piguet guys are blowhards.
I personally like Vacheron Constantin, Breguet and Jaeger LeCoultre. These brands, albeit slightly lesser known, are much more humble, decent, honest, legit, no desire to be boastful or prideful or arrogant.

Something for Panerai?

 

[SPX Options Trader]

Something for Panerai?

Panerai. You're a bold, but gentle and calm, thinking, introspective person. You admire slightly different, and innovative, concepts, brands and items and people/personalities. But you don't like bs and theatrics, you're a reliable, bottom line, direct, type of guy. You prefer cheesecake, over apple pie or a sundae.