Options Trading for Fun and Profit: The Buy-Write
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Thread created 04-04-2011 by chani
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Options are only exercised if it is 'in the money', i.e. current price of stock greater than strike price.
Options Trading for Fun and Profit: The Buy-Write
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Thread created 04-04-2011 by chani
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shipfaced: That statement does not make sense. Selling a Put while owning a stock is a double whammy on the downside. Do you mean selling a "naked" put and you would own the stock if it was "Put to...
Options Trading for Fun and Profit: The Buy-Write
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Thread created 04-04-2011 by chani
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you really have to buy-write in bulk, otherwise the costs of the trades will basically eat any profits that you might be making. the trading costs, depending on the brokerage, could be prohibitively...
Options Trading for Fun and Profit: The Buy-Write
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Thread created 04-04-2011 by chani
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Pretty good explanation Rich. This is how I make my living, actually we use spreads but it's similar.
What you explained is more commonly referred to as a "covered call" altho the term buy-write...
Options Trading for Fun and Profit: The Buy-Write
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Thread created 04-04-2011 by chani
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Shipfaced.. I'm just writing this so that others don't get the wrong idea - but that put you're selling is NAKED!
So... owning or not owning the stock does not hedge those puts.
Options Trading for Fun and Profit: The Buy-Write
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Thread created 04-04-2011 by chani
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The funny thing about naked puts is that a brokerage house will let you buy lets say Apple today at 350.00. They will let you margin at at 2-1 (actually more) But instead of buying 300 Apple Shares,...
Options Trading for Fun and Profit: The Buy-Write
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Thread created 04-04-2011 by chani
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So this is straddle strategy?
I don't know. Do you know how much does a typical fee, the house charge for option? are there tax incentives?
Options Trading for Fun and Profit: The Buy-Write
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Thread created 04-04-2011 by chani
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this is correct.
if you sell the put, and the stock on which you wrote the put tanks below the exercise price, whoever bought the put will sell the stock to you at the put strike price. so...
Options Trading for Fun and Profit: The Buy-Write
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Thread created 04-04-2011 by chani
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First I dont like the heading Buy Write for Fun and Profit. Profit, Maybe. Calling something fun strikes a nerve for me. This is exactly what my friend told me about covered calls back around the mid...
Options Trading for Fun and Profit: The Buy-Write
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Thread created 04-04-2011 by chani
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I just wanted to get it straight.
This is to my understanding.
If you own the stock and then sell puts on the same stock (which I think you listed in my quote above), the stock DOES NOT hedge...
Options Trading for Fun and Profit: The Buy-Write
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Thread created 04-04-2011 by chani
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Just wondering...if in your example; GE is still at $20, would the call option always expire? If the holder of the option is still looking to buy, why wouldn't he exercise the option?
Options Trading for Fun and Profit: The Buy-Write
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Thread created 04-04-2011 by chani
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I've seen these threads devolve into a pissing contest with confusing useless content, you know the ones "I'm so smart so I try to baffle with big words and trading jargon" threads. This can be...
Options Trading for Fun and Profit: The Buy-Write
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Thread created 04-04-2011 by chani
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Now y'all see why I had to escape the meeting, sit down, put virtual pencil to proverbial paper, and work out the numbers in a "real world" scenario to wrap my brain around the "buy-write."
I've...
Options Trading for Fun and Profit: The Buy-Write
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Thread created 04-04-2011 by chani
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By: slickdealer dittyesq
Image by Flickr user Mike Lee
A few months back, I received a phone call from the friendly folks at Morgan Keegan, inviting me to drop by my local Regions Bank (Regions...
Options Trading for Fun and Profit: The Buy-Write
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Thread created 04-04-2011 by chani
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buying stock and selling call = selling put
buying stock and buying puts = buying call
selling stock and selling put = selling call
selling stock and buying call = buying put
(dividends are...
Options Trading for Fun and Profit: The Buy-Write
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Thread created 04-04-2011 by chani
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I want to bring up an issue that most people don't usually think of when selling your calls or your spreads (or buying puts to protect your stock position or buying collars, even).
Remember,...
Options Trading for Fun and Profit: The Buy-Write
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Thread created 04-04-2011 by chani
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come to think about it, by entering into buy-write strategy, you basically limit yourself on the upside, but the downside could be a loss of up to 100% of the stock value minus the call premium...
...
Options Trading for Fun and Profit: The Buy-Write
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Thread created 04-04-2011 by chani
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Thank you.
Options Trading for Fun and Profit: The Buy-Write
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Thread created 04-04-2011 by chani
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Not sure I understand what doesn't make sense to you? When you own the stock (you are bullish) and when you sell a put on that stock (you are bullish). To be a successful put seller the market...
