Ok, so let's see if I understood. I'm watching Disney. I can sell a put on Disney for $85 a share for 100 shares? I think that's a great price, so if I get stuck with it, no biggie, and it might be lower than that to purchase anyway. But if it doesn't get that low, then I keep the $$ I got for selling the put, and no obligation to purchase?
You are absolutely correct, Caroline! I'm looking at the Disney options chain now...
Sell one $85 Dec. 16th put for $545. So if it closes above $85 you're good...no obligation to purchase. If it closes below, you buy it at $85. Your cost basis would be $79.55! Amazing for DIS!
You have until December 16th for this to happen. You can always choose sooner, say October and receive $390. Lots of strike prices and expiration dates.
Very good job of explaining Eric...and appreciate your tidbits of humor. :D
One key thing about getting into this strategy is knowing you need to open a brokerage account with at least $25K to be allowed to participate in this strategy.
Aside from that, you're doing great and looking forward to more editions of this report.
Thanks Roy, I appreciate it. I use E*Trade and they only require $2,000 for selling puts. Maybe others require more? From there you just need the amount of cash needed to cover the purchase of 100 shares of whatever stock you're selling puts on.
Caught an ad yrs ago...James Altucher, odd guy, catching random people off the street to show them how easy to make $200 to $800 in his account and he would give them the cash after a few clicks. I had TD Ameritrade back then and that was scenario to start.
This is a great start to finish guide on options! I can appreciate the background, walk-through and real life examples. Being in the industry, I know how hard it is to understand options and even harder to explain to others - you accomplished both!
Ok, so let's see if I understood. I'm watching Disney. I can sell a put on Disney for $85 a share for 100 shares? I think that's a great price, so if I get stuck with it, no biggie, and it might be lower than that to purchase anyway. But if it doesn't get that low, then I keep the $$ I got for selling the put, and no obligation to purchase?
And Disney hasn't been as low as $79 since 2014!! Sounds like a great entry price.....or an easy $500 for each contract.
You are absolutely correct, Caroline! I'm looking at the Disney options chain now...
Sell one $85 Dec. 16th put for $545. So if it closes above $85 you're good...no obligation to purchase. If it closes below, you buy it at $85. Your cost basis would be $79.55! Amazing for DIS!
You have until December 16th for this to happen. You can always choose sooner, say October and receive $390. Lots of strike prices and expiration dates.
Very good job of explaining Eric...and appreciate your tidbits of humor. :D
One key thing about getting into this strategy is knowing you need to open a brokerage account with at least $25K to be allowed to participate in this strategy.
Aside from that, you're doing great and looking forward to more editions of this report.
Thanks Roy, I appreciate it. I use E*Trade and they only require $2,000 for selling puts. Maybe others require more? From there you just need the amount of cash needed to cover the purchase of 100 shares of whatever stock you're selling puts on.
Dang, that makes a world of difference!!
Caught an ad yrs ago...James Altucher, odd guy, catching random people off the street to show them how easy to make $200 to $800 in his account and he would give them the cash after a few clicks. I had TD Ameritrade back then and that was scenario to start.
This is a great start to finish guide on options! I can appreciate the background, walk-through and real life examples. Being in the industry, I know how hard it is to understand options and even harder to explain to others - you accomplished both!