selling puts....
the expiration date that you select depends on your objectives...selling near term earns a good living, providing the trend is up...requires more maintanence, insofar as being cognizant of the time and the need to roll forward, if it has gone against you..risk is low, as you can roll until the momentum changes, providing the underlying has the capability to move higher.
i remain flexible...a day like yesterday in dell, caused the premiums to go wild...i decided to close short duration positions and go out to jan 01, only due to tremendous premium, and the ability to use same to buy dell common...
the strategy is simple, as the seller time is your ally, it even allows you more time should the market go against you...all you have to do is ask..the buy side is more stringent...but it is cash out, instead of cash in.....cash is king...margin is not..
no hard fast rules, just adapt to where the market leads you...it is a comfortable strategy providing you have the capacity either in cash, or margin to accept the put, and a good knowledge and belief in the underlying....good luck in all the positions you set... |
