Hellow guys, Welcome to my website, and you are watching How to Sell Cash Secured Puts - Options Trading Strategy. and this vIdeo is uploaded by Jake Broe at 2021-03-21T12:00:09-07:00. We are pramote this video only for entertainment and educational perpose only. So, I hop you like our website.
| Name | How to Sell Cash Secured Puts - Options Trading Strategy |
| Video Uploader | Video From Jake Broe |
| Upload Date | This Video Uploaded At 21-03-2021 15:00:09 |
| Video Discription | Check out my entire playlist on Trading Options here: https://www.youtube.com/playlist?list=PLscTZuOqKWIxSZzy4ObKWDznEsCot_1HU 💯 LET’S CONNECT 💯 📷 Instagram @JakeBroe 👉 https://www.instagram.com/jakebroe/ 🐦 Twitter @Broe_Jake 👉 https://twitter.com/broe_jake 👇 👇 Watch My Other Videos Here 👇 👇 ★ Selling Covered Call Option Example on Charles Schwab https://youtu.be/ovViZ5OHFfI ★ The Greeks Explained - How to Trade Options https://youtu.be/3C-NQadRRfo ★ How to Sell Covered Calls - Options Trading Explained https://youtu.be/FS-pzG_Oyto ================ How to Sell Put Options to Benefit in Any Market Selling (also called writing) a put option allows an investor to potentially own the underlying security at a future date and at a much more favorable price. In other words, the sale of put options allows market players to gain bullish exposure, with the added benefit of potentially owning the underlying security at a future date and at a price below the current market price. Call Options vs. Put Options A quick primer on options may be helpful in understanding how writing (selling) puts can benefit your investment strategy, so let's examine a typical trading scenario, as well as some potential risks and rewards. An equity option is a derivative instrument that acquires its value from the underlying security. Buying a call option gives the holder the right to own the security at a predetermined price, known as the option exercise price. Conversely, buying a put option gives the owner the right to sell the underlying security at the option exercise price. Thus, buying a call option is a bullish bet–the owner makes money when the security goes up. On the other hand, a put option is a bearish bet–the owner makes money when the security goes down. Selling a call or put option flips over this directional logic. More importantly, the writer takes on an obligation to the counterparty when selling an option; the sale carries a commitment to honor the position if the buyer of the option decides to exercise their right to own the security outright. Best Practices for Selling Put Options Investors should only sell put options if they're comfortable owning the underlying security at the predetermined price because you're assuming an obligation to buy if the counterparty chooses to exercise the option. In addition, you should only enter trades where the net price paid for the underlying security is attractive. This is the most important consideration in selling puts options profitably in any market environment. Other benefits of put selling can be exploited once this important pricing rule is satisfied. The ability to generate portfolio income sits at the top of this list because the seller keeps the entire premium if the sold put expires without exercise by the counterparty. Another key benefit is the opportunity to own the underlying security at a price below the current market price. Put Selling in Practice Let's look at an example of prudent put selling. Suppose that shares in Company A are dazzling investors with increasing profits as a result of a new, revolutionary product. The stock is currently trading at $270 and the price-to-earnings ratio is at an extremely reasonable valuation for this company's fast growth track. If you're bullish about their prospects, you can buy 100 shares for $27,000, plus commissions and fees. As an alternative, you could sell one January $250 put option expiring two years from now for just $30. That means the option will expire on the third Friday of January two years from now, and it has an exercise price of $250. One option contract covers 100 shares, allowing you to collect $3,000 in options premium over time (less commission). ================ #OptionsTrading #CashSecuredPuts #SellingPuts ================ DISCLAIMER: This video is for entertainment purposes only. I am not a legal or financial expert or have any authority to give legal or financial advice. While all the information in this video is believed to be accurate at the time of its recording, realize this channel and its author makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in this video. ADVERTISER DISCLOSURE: Jake is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to www.amazon.com. Additionally, other referral links are included and this channel does receive compensation for sending traffic to partner sites. Shopping through our links is an easy way to support the channel and we appreciate and are super grateful for your support! |
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