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Strategies & Market Trends : Option Strategies -- Ignore unavailable to you. Want to Upgrade?

To: sm1th who wrote (2433)	12/21/2022 9:49:19 AM
From: robert b furman	1 Recommendation Recommended By investolator2000 Respond to of 2591

Hi sm1th, Totally agree on these discussions benefit the both of us. That IS the true value of SI IMO. I have had some good luck with doing the "I hope it get assigned" selling of a put. Most often it is just luck to catch a dip in the market and be the month of expiration I more of less arbitrarily choose (although I do sell puts farther out in time to boost the time premium and increase the dividend yield based on cost. I then get to be a bit of a scardy cat seller of puts one or two strike prices below that, to help with cash flow and be able to buy more stocks than just what my dividend revenue stream allows. The old truism "That everybody runs out of money sooner or later" still applies. When I make the "IF ASSIGNED THE NET PURCHASE PRICE WOULD BE" and "THE DIVIDEND YIELD WOULD BE" calculations it seems that a safe zone that does NOT get assigned starts somewhere near the 8% range. One strike price below that has been a very safe double down in quantity of puts for cash flow purposes. In the event that price would collapse it would usually yield in the 10% range. Of course that general rule really only applies to a few stocks that I've owned for years and pretty well understand the range in which they move. I'm amazed more people do not do this approach. I avoided options for a very long time and wished I had had a more open mind on them much earlier - especially in the era that option trades were not reported! Doing this in a non taxable account is an excellent approach as well. Once I started doing this approach, I developed the opinion that a lot of those who sell annuities are very quiet about how they harvest put income to add to the dividend income. Hopefully some lurkers here will give it a try and we'll get more eyes on more stock names! There are but a few investors who write articles on options over at Seeking Alpha. Selling puts and calls is just so simple - everyone should learn to do it. IMO Getting ready for a deep freeze event here in Houston - time to gather blankets and cover our plants. Expecting four days of freezing temps. The Uri storm was the same freezing event and it killed all of my citrus trees. I've not replaced them yet. Glad we are down here to help minimize the damage. Bob