Put Option Writing | Stock Option Strategies

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http://www.Zacks.com – Put Option Writing: Learn how to get paid whether the stock goes up or down and potentially get your stock at a cheaper price.


vampov says:

Did they mention anything about the time decay of options? That is what I really wanted to hear writing put options and utilizing the time decay factor of options to make money.

CatMan DO says:

Thank you for making writing Options easier to understand. I had been struggling with this concept for weeks now till you programe. GOD bless you.

dolma Jitsang says:

Thank you very much!!  you people are wonderfull. Very intellegent way to teach to the people.

optionssherpa.com says:

To Flying Ferrara, when you write a put your account does have to have enough money to cover your obligation to buy (i.e. 100 shares of stock at the strike price you sold).  Usually if you get level 4 options (ability to sell naked puts) and have over 25K in your account you can sell naked puts where you only have to put up a percentage margin (usually around 30%).

LiberatedMind1 says:

Good info. I am doing well buying options right now, but I will most probably write them myself in the future.

NapuZupaN says:

Kevin Matras, well done. great explanation – and run through of your trade. really great stuff.

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robertochahin says:

If at expiration you get assigned the stock, you then sell a call option and turn it into a synthetic short put aka covered call. If you picked your underlying right, its a good deal. You should back your option selling with enough cash to buy at strike price.

CornStoveIowa says:

What happens if the price goes below the strike price and premium allocation at the time of expiration … you have to buy it back at the strike price and you are in it in a long position at less than market. Can you protect yourself by selling short at the strike price when the price moves below the strike price and premium allocation? Please advise.

r ramatis says:

Yes it does! This is called MARGIN. Usually the broker will ask a account with at least U$ 25.000 to make sure you are covered if situation get out of control.

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FlyingFerrara says:

When writing a put option does your account have to be funded so that if the buyer exercises the right to sell you can meet your obligation, or can you write the put option without the funds to meet the potential obligation?

Joe Lopez says:

Thank You I will save this address and keep it handy till it sinks in, you helped me wrap my head around the put

maclovindotca says:

@veXati0n You would want something close to the market price if: You want to acquire the stock at a slightly cheaper price and create a buffer with the premium.

You write lower strikes if you don't want it to exercise and your goal is the collecting the premium only. Also you wont get as much premium on lower strikes.

Any time you place an options trade you should accept both possibilities.

maclovindotca says:

People say writing puts is risky because the stock could go from 9.50 to $5 and you would have to sell it at $ 9 ($9 strike), how is this risky when you were prepared to buy it at the market of 9.50.

gurujr says:

Great income and 2nd income producer with selling puts. For those who do it what is the average monthly percent one can expect from receiving the option premium. If I can get 2.5% to 4% I'd be very happy.

924142707 says:

Conceptually it makes a lot of sense if you want to get a stock cheap. If the stock is at 30 and you sell a put for 20 and it hits 20 then you will collect a premium and get the stock you want at the price you want. Puts can be very open too though so do your research as I'm doing now!

Lou C says:


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