- When does one sell a put option, and when does one sell a
- Put Option Explained | Online Option Trading Guide
- Put Option Definition, Put Options Examples, What are Puts?
- Call Option Strategies ~ Best Option Strategy
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When does one sell a put option, and when does one sell a
Trading Put and call options provides an excellent way to lock in profits, maximize gains on short terms stock movements, reduce overall portfolio risk, and provide additional income streams. Best of all, trading them can be profitable in bull markets, bear markets, and sideways markets. If you are trading stocks but you are not using protective puts , buying a call , or if you have never sold a covered call option , then you are not making as much money as you can and you are missing out on some nice profits. The recent volatility in the stock market has provided unusually profitable opportunities. While stock traders generally dislike volatility, option traders love volatility because it's easier to make profitable trades when the markets are moving up and down every day.
Put Option Explained | Online Option Trading Guide
So, again, what is a put? Since put options are the right to sell, owning a put option allows you to lock in a minimum price for selling a stock. It is a "minimum selling price" because if the market price is higher than your strike price, then you would just sell the stock at the higher market price and not exercise it.
Put Option Definition, Put Options Examples, What are Puts?
A Put option "increases in value" when the underlying stock it's attached to "declines in price", and "decreases in value" when the stock goes "up in price".
Call Option Strategies ~ Best Option Strategy
Managed Futures | CTAs | Autumn Gold
Market conditions often dictate broad market selloffs. Timed right, the old adage of buying low and selling high can still be profitable. However, novice traders often jump in too soon, trying to catch a falling knife. Our subscribers are prone to getting in at just the right time. Join our option trading strategies subscriber list now and receive all upcoming trade recommendations.
Say you were spot on and the price of XYZ stock plunges to $85 after the company reported weak earnings and lowered its earnings guidance for the next quarter. With this crash in the underlying stock price, your put buying strategy will result in a profit of $855.
Risk Warning: Stocks, futures and binary options trading discussed on this website can be considered High-Risk Trading Operations and their execution can be very risky and may result in significant losses or even in a total loss of all funds on your account. You should not risk more than you afford to lose. Before deciding to trade, you need to ensure that you understand the risks involved taking into account your investment objectives and level of experience. Information on this website is provided strictly for informational and educational purposes only and is not intended as a trading recommendation service. shall not be liable for any errors, omissions, or delays in the content, or for any actions taken in reliance thereon.
Here's another example of why a lot of people trade put options. If you bought a 655 shares of Apple Computer (AAPL) at $55 many years ago and you are afraid the price might drop temporarily, yet you want to hold onto AAPL for the long term, you should buy a put option.
**However, stock option contracts cannot be traded on Saturday so for trading and practical purpose we say that stock option contracts expire on the 8rd Friday of the month of expiration.