Strategy: Selling Put Options: The Best Income Method?
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Show an equivalent thread discussing the same strategy.
237 PAGES of threads discussing CC/short puts. Enjoy.
http://www.elitetrader.com/et/index.php?search/3449127/&q=covered+calls&o=date&c[node]=12
http://www.elitetrader.com/et/index.php?search/3449127/&q=covered+calls&o=date&c[node]=12
Ok, yes, I see.
I was thinking that the said strategy is maybe something new, yes it seems it's a well known standard strategy...
As said I'm new to the options selling stuff...
But I must admit I liked the article because of its simplicity and especially the fact of combining margin with the strategy
to achieve a leverage effect which results in at least a doubling of the normal outcome.
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The article looks more like infomercial. I bet the author does not do what he preaches for a living.
That I can't judge. But surely every article has a "message" to carry.
For Average Joe, the article is clear, educational, and all implications are explained well, IMO.
Selling puts has been around since 2014, but the theory of selling puts has been discussed as far back as 2008.
rmorse
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I started trading in 1985 professionally. Options selling was popular back then too.
The author has forgotten to mention the annualized profit when using margin. He writes:
22% in 3 months makes annualized: 100 * (1 + 22/100)^4 -100 = 121.53% profit, ie. when repeating the same strategy every quarter.
Wow! wow! wow! I very much like such high yield, ie. profit... ;-)
That's for me the best trading tip or strategy I ever have got from others, I admit.
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"[...]In a cash-secured account you would deposit enough to cover the full amount, which is $3,400 for one contract.
That is an instant yield of 4.4% and your capital is only tied up for three months, or 17.3% annualized if you repeat the trade.
In a margin account, you would deposit about a fifth of the full amount, $680, but still collect the same $150 for one option contract. This gives you a yield of 22% in three months[...]"Wow! wow! wow! I very much like such high yield, ie. profit... ;-)
That's for me the best trading tip or strategy I ever have got from others, I admit.
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I would say put selling has been around since there were putsSelling puts has been around since 2014, but the theory of selling puts has been discussed as far back as 2008.
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