05-10-2017, 06:40 AM
(05-09-2017, 07:41 AM)crimsonghost747 Wrote:The 2 risks that you need to understand are if selling a put and the price is below your strike at or near expiration, you will be obligated to purchase 100 shares per put contract that you sold.(05-09-2017, 05:33 AM)NilesMike Wrote: Why not stick to better companies and sell some options to increase your yield?
I'm not exactly comfortable trading options yet... but I'll take a look when I have the time to see if there is a strategy that would fit my needs. I don't have a lot of time to spend on it and I want it to be pretty safe... and of course keeping those two things in mind, I don't expect to make any huge gains. Any strategy that would more or less fit into this train of thought?
If you sell calls against stock you own (again 100 shares per call contract sold), the stock will be called away from you (sold) if price of stock is above your call strike price (dividend risk notwithstanding).
So the 2 risks come down to buying stock at a reduced price or selling your stock for a profit. Less risky now isn't it?