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Tag Archives: Cash-secured puts
put-selling calculations

Selling In-The-Money Puts to Generate Higher Premiums: Evaluating a Real-Life Trade

Selling Cash-Secured Puts can be used to accomplish several goals; Generate cash flow Buy a stock at a discount Used as part of a multi-tiered option selling strategy along with covered call writing (PCP strategy) Our strategy goal along with overall market assessment, chart technicals and personal risk tolerance will ultimately guide us to the […]

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covered call writing and puit-selling comparisons

Comparing Similar Covered Call Writing and Put-Selling Positions

Covered call writing and selling cash-secured puts are similar strategies that do have certain differences. In my book, Selling Cash-Secured Puts, Figure 68 on page 214 highlights the similarities and differences between these two strategies. In this article, I will show a real-life example of how analogous positions in each strategy frequently will yield similar […]

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selling cash-secured puts

The CBOE S&P 500 PutWrite Index (PUT): An Explanation and Evaluation of Lessons Learned

The PutWrite Index (“PUT” or “$PUT)  is an index created by the CBOE (Chicago Board options Exchange) which acts as a benchmark index that measures the performance of a hypothetical portfolio that sells S&P 500 Index (SPX) put options against collateralized cash reserves held in a money market account. It is similar to the “BXM” […]

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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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option-selling decisions based on implied volatility

Implied Volatility of ETFs and our Covered Call Writing and Put-Selling Decisions

Covered call writers or cash-secured put sellers who use ETFs (as opposed to individual stocks) tend to be novice put writers, more conservative investors, or have limited funds or time. If you fall into any of these categories, knowing your risk level is critical to your investment decisions and specifically, to which underlying securities you […]

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Alan Ellman/covered call writing seminar

Capital Gains (Losses) For Selling Cash-Secured Puts In Non-Sheltered Accounts

In a recent article, tax implications for covered call writing was discussed. In this publication I will highlight the tax ramifications as they apply to selling put options. What is a Capital Gain?  A capital gain is an increase in the value of as capital asset, such as a stock or an option that gives […]

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covered call writing and puit-selling in bear markets

Generating Profit When Share Price Declines 10% In Two Months

Can we use covered call writing and selling cash-secured puts to generate profits when share price declines by 10% in two months in a bear or volatile market environment? I am writing this article on January 5th, 2015, the worst day the market has experienced in  over three months. This hypothetical trade represents an unscientific […]

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market volatility and option-selling decisions

Covered Combinations: Merging Covered Call Writing and Put-Selling into One Strategy

A Covered combination (“combo trade”) trade is the simultaneous sale of an out-of-the-money (OTM) call and an out-of-the-money  put with the same expiration date on 100 shares of a stock or ETF (exchange-traded fund). It consists of a combination of a covered call and a short put position on a share-for-share basis. The investor generates two premiums from the […]

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covered call writing and put-selling inj bear markets

Comparing Covered Call Writing And Put Selling In Bear Markets

Our stock options strategies, whether writing covered calls or selling cash-secured puts (the topic on my just published book) requires us to make an overall market assessment before entering any trades. In last week’s article we evaluated bull market scenarios. In this week’s blog we will examine bear market environments. When selling covered calls we would favor in-the-money […]

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