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exit strategies for covered call writing and put-selling

Delta and Declining Stocks: Comparing Covered Call Writing and Put-Selling

“Covered call writing and put-selling are exactly the same strategies” Now you haven’t heard that from me but we have all heard it often enough to wonder why so many believe this. The main reason, the theory goes, is that the risk-reward profiles for both strategies are precisely the same and so that means that the […]

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strike selection when selling cash-secured puts

Using Out-Of-The-Money Puts and In-The-Money Calls to Manage Bear Markets

Strike price selection should be a focus when selling call and put options. With the stock market bearish and volatile at the start of 2016, this article will highlight how such choices will offer significant protection while still allowing for compelling returns. The stock I selected to demonstrate the main points is Adobe Systems, Inc., […]

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using options to protect low-cost basis stocks

Using a Zero-Dollar Collar to Protect Low Cost Basis Stocks

Using covered calls and puts in a conservative manner can benefit us in so many ways. In this article I will present a method to protect stocks in our portfolio that have increased in value substantially since they were purchased. We will utilize both covered call writing and protective puts which is known as the […]

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selling cash-secured puts

Can We Use Deep-In-The-Money Puts to Buy a Stock at a Discount?

One of the practical applications of selling cash-secured puts is to buy shares “at a discount” In my books and DVDs I use out-of-the-money puts in lieu of setting limit orders in order to accomplish this goal. Some of our members have inquired about using deep in-the-money puts (strike well above current market value) instead […]

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Put-selling on ETFs

Using Puts and SelectSector SPDRs to Create an Ultra-Conservative Option-Selling Strategy

Selling out-of-the-money puts and using top-performing SelectSector SPDRs can be combined to design an extremely defensive option-selling strategy in a volatile market environment like we are currently experiencing. Using Inverse Exchange-traded Funds is another approach. In this article, we will discuss the former strategy,.  When we sell an out-of-the-money cash-secured put we are agreeing to […]

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selling puts

Selling Cash-Secured Puts On An Index

The index short put strategy is a form of selling cash-secured puts. It is a bullish strategy with the goal of generating premiums selling put options that expire worthless. Traditionally, at-the-money strikes are sold. As opposed to using stocks and exchange-traded funds as the underlying securities, index options are cash-settled at a profit if the strikes […]

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selling cash-secured puts in bear markets

How to Generate 10% Per Year in Bear Markets by Selling Stock Options

Covered call writing and put-selling generate monthly cash flow with the inherent risk of share depreciation. One of the major advantages of these conservative strategies is that they can be tailored to all market environments. In today’s article I will address one way to “stay in the game” even when market conditions are working against […]

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exchange traded funds for covered call writing and selling cash-secured puts

ASHR: Exchange-Traded Fund in the Spotlight

Exchange-traded funds (ETFs) offer covered call writers and put-sellers the advantage of instant diversification and generally have a lower implied volatility associated with them compared to individual stocks. Whether we are dealing with stocks or ETFs each security must be evaluated on its own merit before using it as the underlying security. In this article, […]

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put-call parity and ex-dividend dates

Why Are Call Premiums Larger Than Put premiums For Near-The-Money Strikes?

When studying covered call and put-selling option prices we learn that the market will correct any potential arbitrage opportunities. Arbitrage is the simultaneous purchase and sale of an option in order to profit from a difference in the price. It exploits price differences of similar financial instruments. This would not be fair and rarely exists […]

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