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When you sell, or “write,” an options contract you make money from the premiums that the buyer pays you. But be careful. Writing a put contract comes with potentially significant risks.
Selling puts. Selling put options can be an attractive strategy to generate a nice premium, ... The sold put generates cash, and the purchased put costs money, but it ends up as a net credit. The ...
In order to make money buying or selling puts or calls, you need to be confident of which way the stock will move. When you buy a put, you are buying the right to sell 100 shares of a particular ...
Guts - buy (long gut) or sell (short gut) a pair of ITM (in the money) put and call (compared to a strangle where OTM puts and calls are traded). Butterfly - a neutral option strategy combining bull and bear spreads. Long butterfly spreads use four option contracts with the same expiration but three different strike prices to create a range of ...
In finance, a put or put option is a derivative instrument in financial markets that gives the holder (i.e. the purchaser of the put option) the right to sell an asset (the underlying), at a specified price (the strike), by (or on) a specified date (the expiry or maturity) to the writer (i.e. seller) of the put.
If the stock price stays the same or rises sharply, both puts expire worthless and you keep your $350, minus commissions of about $20 or so. If the stock price instead, falls to below 18 say, to $15, you must unwind the position by buying back the $19 puts at $4 and selling back the 18 puts at $3 for a $1 difference, costing you $1000.
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