Comments on: Selecting the Best Put Strike Based on Overall Market Assessment https://www.thebluecollarinvestor.com/selecting-the-best-put-strike-based-on-overall-market-assessment/ Learn how to invest by selling stock options. Sat, 23 Sep 2017 02:03:00 +0000 hourly 1 By: Justin P. https://www.thebluecollarinvestor.com/selecting-the-best-put-strike-based-on-overall-market-assessment/#comment-127872 Sat, 23 Sep 2017 02:03:00 +0000 http://www.thebluecollarinvestor.com/?p=15949#comment-127872 In reply to Justin P..

Thanks Jay & Mario. I’m treading cautiously again this month, and for the opposite reason to last month – instead of plunging downwards, the market’s been sprinting upwards instead, so I’ve been waiting for the second week to put on more positions. Not so much of a rush anyway with a five week contract I think.

Justin

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By: MarioG https://www.thebluecollarinvestor.com/selecting-the-best-put-strike-based-on-overall-market-assessment/#comment-127792 Fri, 22 Sep 2017 15:34:22 +0000 http://www.thebluecollarinvestor.com/?p=15949#comment-127792 In reply to Justin P..

Great XLS Scan results – Justin. Thanks for the information.
Mario

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By: Alan Ellman https://www.thebluecollarinvestor.com/selecting-the-best-put-strike-based-on-overall-market-assessment/#comment-127612 Thu, 21 Sep 2017 20:56:14 +0000 http://www.thebluecollarinvestor.com/?p=15949#comment-127612 In reply to Harini.

Harini,

It is true that the time value of an option will decrease as expiration approaches but the total premium value may increase due to increase in share price or volatility.

Now, if we want to write a call and sell our shares, the deeper out-of-the-money we go, the less likely will be exercise (the strike expiring in-the-money). If you want to continue to generate additional income and hold the stock but if exercise occurs, you’re okay, then out-of-the-money strikes would work.

If you’re looking to sell the shares via option exercise, in-the-money strikes are more appropriate.

Alan

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By: Harini https://www.thebluecollarinvestor.com/selecting-the-best-put-strike-based-on-overall-market-assessment/#comment-127600 Thu, 21 Sep 2017 19:22:33 +0000 http://www.thebluecollarinvestor.com/?p=15949#comment-127600 Alan,

I have recently purchased your book complete encyclopedia for covered call writing.

I have a question on options,is the option value always decreases as it reaches towards expiration (as the time value decays).

I want to write the covered calls for existing my stocks to called away,should I be choosing way OTM strikes?

Thanks,
Harini

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By: Jay https://www.thebluecollarinvestor.com/selecting-the-best-put-strike-based-on-overall-market-assessment/#comment-127417 Wed, 20 Sep 2017 18:00:11 +0000 http://www.thebluecollarinvestor.com/?p=15949#comment-127417 In reply to Justin P..

Great stuff, Justin!

I don’t know if I would have gotten any further in my working years if I had your spreadsheet and computer skills but I would have been able to impress the “whiz kids” on my staff that grew up with iPhones and laptops :)! – Jay

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By: Jay https://www.thebluecollarinvestor.com/selecting-the-best-put-strike-based-on-overall-market-assessment/#comment-127397 Wed, 20 Sep 2017 13:51:13 +0000 http://www.thebluecollarinvestor.com/?p=15949#comment-127397 In reply to Roni.

Good morning Roni,

I am in Central time US so I will be tuned for the 1PM announcement. As Justin mentions below betting against Yellen and the Fed has been a losing proposition so it will not surprise me if the market responds favorably and we get some decent call prices for current holdings this afternoon. Often there is a “sell the news” profit taking dip the following days which might present some buying opportunities for our ready cash. – Jay

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By: Roni https://www.thebluecollarinvestor.com/selecting-the-best-put-strike-based-on-overall-market-assessment/#comment-127394 Wed, 20 Sep 2017 13:12:08 +0000 http://www.thebluecollarinvestor.com/?p=15949#comment-127394 In reply to Jay.

Thanks Jay,

The market was favorable, and that makes it far easier to manage our trades successfully.

Let’s see what the FED meeting will cause.

I’m holding 50% in cash while waiting.

Good luck to you.

Roni

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