16 Comments

  1. If I have a 100 stocks at price 40 and the current price is 50, I sell a put at 50. When the price drop to 40, does it automatically sell my 100 shares to cover the put loss?

  2. If you sell a put…..and the buyer has 30 days out ,,dont you have to wait it out til the exp. date before you know where you stand..? And if the price falls ,,,are you assigned 100 times the share price.??

  3. has to be the worst explanation of how selling a put works. Geez.
    Simple: If the price falls below the the strike price you keep the premium and the stock gets assigned to your account at the strike price.
    If the price stays above the strike the option expires and you keep the premium.
    A word of advice you don't want to be the buyer of a Put option as the time decay will work against you.

  4. Yes Mark, RE: Interactive Brokers – On a Demo account. I indeed understand the thesis cannot transact without an error message, click SELL on a Put sell premium .11 with an Ask and Bid of .1 and .12. Just rejects order, I cannot however BUY the Put option, but that then is a buy put. WOW, hard work, hard heavy head ache work

  5. Mark, have a question. UK Broker ( US Stocks ); can you advise which do puts and calls with strikes, as IG and SAXO doesn't seam too. On a learning curve , thansk Dan

  6. SIR PLS GUIDE ME REGARDING MY QUERRY –

    MY VIEW IS BEARISH FOR TREND.

    NIFTY SPOT PRICE – 12350

    CALL SELL – STRIKE PRICE – 12400 (OTM)

    PREMIUM – 40

    UPPER BREAK EVEN – 12440

    LOWER BREAK EVEN – 12360

    THIS IS MY QUERRY –

    * WHAT TO I CHOOSE THE VALUE FOR STOP LOSS WHERE I COULD BE IN NO PROFIT OR NO LOSS. WHERE MY LOSS WILL BE ONLY BROKERAGE AND OTHER EXCHANGE CHARGES.

  7. So, we buy Calls to see the "charts increase in price over time",…we buy PUTs to see the charts decline. How to we "Sell to Close" PUTS to make money; example.
    We buy a Dec 20th PUT on ABC stock, and pay .75 ( $75 per Option contract). How do we "Sell to Close this PUT" if we paid .75/contract?
    Are we "closing with anything over the .75 we paid…such as, for example…./.85, .95, 1.50, etc?
    So, as the PUT becomes more valuable to "us"….we are titrating up in cost to close this?

  8. so… where are your strategies? I already know the intrinsic values and how to sell Puts and how they are assigned or not. I wanted to see strategies. Good example for people that don't know the set up.

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