Options Strategies: Shorting Puts & Simultaneously Reducing Cost Basis

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Learn how you can ladder puts to reduce your basis and get long equities over time!

See more institutional trade ideas: http://bit.ly/1s1L9nu

One way that we can take we can lower our basis is by selling puts when Implied Volatility (IV) Rank is high. This is a popular strategy used by institutions that want to be long a low priced underlying. Here the managers will sell puts when IV Rank is high. If the underlying falls, they are able to buy the stock at a lower price. If the underlying rallies, they will be able to keep all of the credit they sold the put for and reduce their basis by that amount. Today, Tom Sosnoff and Tony Battista are joined by Joe Kinahan from TD Ameritrade as they break this strategy down. Joe explains how you are able to move to lower strikes and out in time to collect a similar credit for each put. This allows you to continually reduce your basis in an underlying that you would like to be long!

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Comments

Kmt Mugabe says:

Liquid underlines are listed where?

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