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Buying and Selling Options

Calls Buyer has the right to buy the Stock Want the Stock to Appreciate in Value Buyer Pays the Premium Seller Has the Obligation to Sell the Stock Want the Stock to Depreciate in Value Seller Collects the Premium. Puts Buyer has the right to Sell the Stock

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Buying and Selling Options

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  1. Calls Buyer has the right to buy the Stock Want the Stock to Appreciate in Value Buyer Pays the Premium Seller Has the Obligation to Sell the Stock Want the Stock to Depreciate in Value Seller Collects the Premium Puts Buyer has the right to Sell the Stock Want the Stock to Depreciate in Value Buyer Pays the Premium Seller Has the Obligation to Buy the Stock Want the Stock to Appreciate in Value Seller Collects the Premium Buying and Selling Options BUYER SELLER

  2. Components to Selling Puts Three Main Components P = Price T= Time Decay V= Implied Volatility

  3. Price Price is KING! 1- Your stock should be uptrending or sideways 2- The strike you sell should be at or under support 3- Oscillators are best when they are moving upward

  4. Implied Volatility How can Implied Volatility HELP you in Selling Puts? Allows you to sell overvalued options

  5. Time Value How does Time Value help you in Selling Puts?

  6. Time Decay Rate of time decay is slower in the early months and faster as it nears expiration.

  7. Selling Puts Risk

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