Selling Put Options For Income - Extra Income Or Insurance on Stocks You Own?

The downside of this covered call strategy, is that since you have written deep ITM call contracts

, if the stock price is above $15 at expiry date, you are likely going to be called to sell your shares at $15. But you have already received the extra $5 in premium earlier so there is no loss. But if the current market value of the shares has risen to say $24 by now, you have foregone the potential gain on the shares you would have otherwise made. But it's a great choice in a bear market or at what you believe to be the top of an uptrend. Selling Put Options For Income

Selling Put Options For Income - Extra Income Or Insurance on Stocks You Own?

By: Trading Expert

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