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Conservative option strategies, what did you buy or sell today?
I'll try to help along regarding basic put and call selling the way I do it (or at least should be doing, discipline is always important when dealing with $$$)

1. I ONLY trade options on stocks that I own or would like to own.

2. The options are either cash secured (puts) or covered (calls). No margin use or needed for these.

3. I sell the option 30-45 days to expiration, sometimes I'm only in them for a week or 10 days. That is when the market decides to accommodate my goals.

4. I sell puts when the stock has moved down, either near the bottom of the range or just a couple of day decent down move. Why? I can more comfortably sell closer to the current strike price. (most premium and most theta to decay)

5. I sell calls after the inverse. Moves to the top of a range or a good couple of decent up days. Why? I will most likely have a profit on the stock at that point, I can add some option premium to sweeten things and again more premium near the money and more theta to decay if the stock decides to take a rest and pull back a while.

6. Exits. More art than science but if I can get 50% of my premium in the bank, I close the option position.

7. Assignment. I do not roll options. If I don't have the chance to take a 50% winner I will let it run towards and to expiration. The goal of every covered call is to get called away (I know some disagree but most pros go with that thought process. If every covered call I put on gets called away, I welcome the high class problem.

Same with being put stock, I then put on a covered call. With the stocks I use, there are dividends to be aware of as well. I have closed options if it was expiring after ex div date. I DO try to get as many dividend payouts as possible. Essentially that is the only managing I do after entry.

With this strategy I have collected the average of a dividend payout about every 3 weeks.
I have also found that the extra engagement with these stocks keeps me on top of them better.
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Messages In This Thread
T puts ? - by john - 03-17-2020, 09:33 AM
RE: T puts ? - by fenders53 - 03-17-2020, 10:32 AM
RE: WEN options update - by john - 03-23-2020, 09:53 AM
RE: WEN options update - by fenders53 - 03-23-2020, 10:40 AM
RE: Conservative option strategies, what did you buy or sell today? - by NilesMike - 10-05-2020, 07:43 PM



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