Today, I want to show you the right way to sell put options. Whether you’re an investment veteran or just opening your first brokerage account, I urge you to listen. Chances are you need to hear this message. #-ad_banner-#Regular readers of StreetAuthority likely know that a put option is a security that gives the buyer the right — but not the obligation — to sell a stock for a certain price in the future. In return for opening the trade, the seller receives an upfront cash payment known as a premium. Done correctly, selling puts is one of the best… Read More
Today, I want to show you the right way to sell put options. Whether you’re an investment veteran or just opening your first brokerage account, I urge you to listen. Chances are you need to hear this message. #-ad_banner-#Regular readers of StreetAuthority likely know that a put option is a security that gives the buyer the right — but not the obligation — to sell a stock for a certain price in the future. In return for opening the trade, the seller receives an upfront cash payment known as a premium. Done correctly, selling puts is one of the best investment strategies available. It’s a great way to collect thousands of dollars in additional monthly income. The problem is that many investors sell puts the wrong way. When most options sellers approach a trade, they engage in something I like to call “premium chasing.” That is, they only look for trades that offer the highest premiums. They’ll sell puts on things like gold miners, tech startups or boom-and-bust companies. Because these stocks are volatile, they tend to offer higher payouts. This is without a doubt the biggest mistake an options seller can make. Selling options on high-risk stocks just because… Read More