1 / 7

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

sylvia
Download Presentation

Buying and Selling Options

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  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

More Related