Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
Current high yielders
#11
Why not stick to better companies and sell some options to increase your yield?
Reply
#12
(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?
Reply
#13
(05-09-2017, 07:41 AM)crimsonghost747 Wrote:
(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 have enough shares (100+) you could sell Out of The Money calls. If you wish to own more shares you could sell OTM puts.

Your best days to sell calls are after an up move and sell puts after a down move.

The details of when, which etc. are all up to you, your risk tolerance, goals and wallet.
Reply
#14
(05-09-2017, 07:41 AM)crimsonghost747 Wrote:
(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?
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.

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?
Reply
#15
(05-10-2017, 06:40 AM)NilesMike Wrote:
(05-09-2017, 07:41 AM)crimsonghost747 Wrote:
(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).
... or selling your stock for a profit. Less risky now isn't it?

Yeah this strategy might work for me, though obviously if the share price keep goes above the strike then, while still earning money, I'd be earning much less than what I would have earned without the option. But I guess that's the price I'd be willing to pay for the premium.

Thanks for the help, I still need to do more research and then actually take a look at the available options to see if there are any that would work for me. I don't have many shares where I own more than 100 so that might be an issue, but I'll see what I find with the shares where I do have a large enough position.
Reply




Users browsing this thread: 1 Guest(s)