they know about buy and hold and instead start from a blank page and the concept and reasons for Put Selling will quickly become clear. When this occurs results can be disasterous for a portfolio as overvalued stocks plummet faster than they climb often trapping the put seller and leaving behind large losses. It certainly does not take much time. Put Selling On Cat Stock Jan 6, 2011 A question from a reader regarding put selling on Caterpillar stock resulted in this article in which I discuss married put, naked put, spread and collar as financial investment strategies to consider. It is a simple concept which once learned can be reused daily by investors to prepare them for when to buy stock and sell it as well as those of us who prefer put selling or covered calls as a principal investment strategy.
Bull Put Spread Explained Nov 7, 2011 Bull put spread strategy is more conservative than put selling, with defined losses established right at the outset. If the put is exercised, they will be buyers at a price they believe represents a fair value for the stock. Limited profit potential, in addition to the premium received for writing the call, the OTM covered call strategys profit also includes gain if the underlying stock price rises, up to the strike price of the call option sold. Selling naked and covered put options. This article is 2700 words in length and if printed will take 10 pages. The formula for calculating maximum profit is given below: Max Profit Premium received Purchase Price of the Underlying Strike Price of Short Call Commissions Paid. Put Selling And The 12 Goal Jan 30, 2012 Many investors find that earning 1 a month or 12 a year is difficult when stock markets move higher. If for example a portfolio returned 12 in a year, Put Selling with margin could be used to boost that return by 3 or sometimes better while keeping risk low and selling against rising stocks. Here are my 4 Basic Rules For Put Selling. However you will find many option traders who have lost a lot of money in the markets like here and here. We just discussed the break even points if it is breached you should take a stop loss.