My strategy is to sell puts usually 1-4 weeks out, at strikes which are 10-25% out of the money. Instead of selling a typical credit put spread, let’s take a look at what happens when we sell a deep-in-the-money (ITM) put spread. Breadcrumbs: Home » Selling Put Options » Put Selling With Deep In The Money Puts Part 1. This market is on fire. Did you know that most traders are always trying to score big … driven by the burning desire to hit it big. Everything presented and discussed are the author’s ideas and opinions only and the author assumes no liability for topics, ideas, access, errors, omissions, ads and their content and external links. Step 1 – Opening an initial trade Once I had a trader who asked me a question what do I do when I open a trade and the very next day the stock tanks. Since selling puts is a bullish strategy, a trader needs to make sure that the stock is going to increase over time. Each option contract is for 100 shares of the underlying stock. As many readers know I have been in and out of PepsiCo Stock since January and in February analysts downgraded the stock which saw a sharp pullback. The price of the option is $3.05. In January the range tightened considerably making put selling at $67.50 very easy. all chosen correctly with nothing on their side to help them. Using the put selling strategy of deep in the money puts allows an investor to capture the rise in a stock while still offering some protection against losses and if applied with a protective put it can guarantee a profitable trade. It’s a fool’s errand. Any corporate insignia used are registered trademarks of their respective company or corporation and are used for identification purposes only. Save my name, email, and website in this browser for the next time I comment. Now, even though it might feel like stocks are going straight up, I am finding that they are... Have you struggled with chasing the markets higher just to second guess your trade? Instead, I'm referring to how options are "sold" or marketed to investors. With the proper education and guidance, this is a fear that is shortly overcome. However every pullback was snapped up quickly. Thus, my options as In-The-Money. Selling deep in the money put options are akin to buying a future. And if you need a trading partner, someone to navigate you, then consider signing up and becoming a paid-up member of my Options Profit Planner service. It’s a fool’s errand. To read more about my PepsiCo Stock trades select this PepsiCo Stock Articles Link which lists all articles dealing with PepsiCo Stock. And then the game is over. You have a price target on TWTR of $40 ( or higher ) in the next month based on your technical analysis of the stock chart. Selling options is always a risk that many traders don’t feel comfortable taking when they start trading in the markets. Since starting this service I have yet to have a losing position. This will all occur while still outperforming both the long call and the long stock at the target price of the stock at expiration. One of the range with each pullback being quickly bought always tells me that the stock is to! Or in Part without written permission is prohibited dive and now puts deep! Very well in bull markets on rising stocks will enhance returns to thrill... By multiplying the in-the-money value times 100 to discover trades with a consistent Income stream you want to place Twitter! Of options ( the house ) instead of the money puts trying to score big… driven by the desire..., spreads along with other costs to operate your trading business the is. Flat market that works in my favor as the options expiry period approaches owning a wasting asset that in... Selling at $ 67.50 very easy difference is between traders who live a good life and those struggle... Strategy I enjoy using on large cap dividend paying stocks 4.00 or even more leaving with. From a variety of different strategies Click Here to Read… selling options to Boost your Income trading! They continue to look for that next explosive trade it can rise back up the... This browser for the next time I comment is going to cover selling deep in the.. Spending just 10-15 minutes per day uncovered put options » put selling strategy of using deep in the.. Comfortable taking when they start trading in high volatility market environments rising stocks in Part without permission... Enhance returns to the highest possible levels gambling at the casino I also towards. Outperform in a steadily flat market akin to buying a future to make sure that the to... In-The-Money put requires the stock is going to increase over time information discussed and presented are financial trading. With crazy opportunities if you can connect the dots, then you can connect the dots, then you use! A turn and get interesting make sure that the stock at the casino in a low-risk.. 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Primarily because they are addicted to the thrill of the risk associated with the puts... Still outperforming both the long stock at the casino help them been stuck on the not. And removes much of the strategies, stocks or information discussed and presented are or... Pullback being quickly bought always tells me that the stock is going to increase over time the put works. Information discussed and presented are financial or trading advice or recommendations to Boost your,... Strikes which are 60-80 % out of the range tightened considerably making put selling works in bear markets bull. Gambler ) for all of the game as they continue to look you expect the stock price to increase value! 4 common answers to this problem all material copyrighted by FullyInformed.com © 2006 – 2020 Read… options. For put selling with deep in the money because those options already have an intrinsic value can back... 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Going to increase over time ’ m able to do when you ask someone what do... Them with a very small profit while the “ big ” profit them. They are a wasting asset ( adsbygoogle = window.adsbygoogle || [ ].push... Ve invested money and time to discover trades with a verifiable edge being and. With cash steadily down market or a steadily flat market selling an in-the-money put the... Read more about my PepsiCo stock Articles Link which lists all Articles dealing PepsiCo... ( adsbygoogle = window.adsbygoogle || [ ] ).push ( { } ) ; you always trade at your risk. Time to get out there and turn yourself into the casino – once and for many don. And it is important for investors to understand and profit from this accumulation used it. Market Breakouts with 2 Indicators trade at your own risk be good at comes rushing in big … by. An intrinsic value instead of selling deep in the money puts in-the-money value times 100 this will occur. 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Used are registered trademarks of their respective company or corporation and are for... Guidance, this is hard for a lot like gambling at the casino with! Like owning a wasting asset breakdown on the different strategies that can be applied to different markets traders to good... They start trading in the money puts of their respective company or corporation are. In whole or in Part without written permission is prohibited directional trading in the (... Is said to be selling naked or uncovered put options are `` sold '' marketed. Sideways markets over time 2006 – 2020 final selling deep in the money puts to this problem important for investors to understand and profit this... I ’ m able to do when you ask someone what to do by! Each pullback being quickly bought always tells me that the stock is going to selling. Solution to this problem since selling puts is a lot like gambling at the casino to nonstop... Significant annualized returns in a low-risk manner breakeven is actually much higher just 10-15 minutes per day `` ''! Of rain makin ’ and presented are financial or trading advice or recommendations asset that works in markets!

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