Elmer, after some thinking, the problem with put selling for me is this:
I would have to leave money on the side (cash-on-the-side) to buy shares if the stock dropped. But I'd rather have that money in the market, than in the bank waiting for a stock to drop. Put selling (assumed you meant strike < market) is more bearish than just writing OTM covered calls. So I am probably more bullish than you in style.
But if the stock drops, I can collect premiums on the way down as I buy the CCs back and rewrite at a lower strike price.
In some ways, selling a put (assuming you meant strike < market) is like a deep-in-the-money call, (not in the implementation but in the bottom-line $), and I only do DITM CCs on AMD, not Intc, and deep because with AMD I don't care if the stock gets called away - it's not an underlying stock I'd want to hold. But with Intc I actually want to hold the shares for growth, not leave all the money in the bank.
I think selling puts is a good idea if you're more conservative (which I'm not) because it's a strategy that requires cash-on-the-side, not in the market - cash that is not put to work.
Regards,
Amy J |
