03-16-2020, 01:37 PM
(03-16-2020, 12:36 PM)john Wrote: Hi Fenders,My rules are somewhat fluid but I have to be truly OK with owning the stock for years in case that is how it ends. Don't get sucked into a high premium just for the sake of the premium. You'll get burned soon enough if you do it often. When the market drops like now, you'll end up getting assigned some shares at much higher prices than you desire. In a normal market, I sell puts when the stock is in the bottom third of it's trading range or preferably oversold a bit. That almost always works out. I no longer sell covered calls on quality stocks if I get assigned and they are still oversold. You end up trading nickels for dollars WAY too often by committing to lock in a loss if you get exercised. If you are OK with the loss, you sold a put on the wrong stock and were just chasing premiums. You assumed the risk, but don't get the reward when they rebound. Wait for a better time to sell the covered calls.
How do you decide if the market is right to sell options? This morning I sold a put option, 12.00 strike for .57 for 3/20 expiration on WEN
I am not great at technical analysis it just seemed like a good deal wether I get assigned or not.
Although my OZK put @ 22.5 and my GEO put @16.00 from a month ago for 3/20 expiration seemed like good deals at the time also lol
Oh well il just sell covered calls against them next week.
Thanks, John