re: Trading Puts and Calls

Put options expire worthless a vast percentage of the time. Some studies have indicated almost 80% of the time. The best study tracked only index options and the most heavily traded ones. Equity and commodities.

Now if put selling is cash secured, and you are prepared to have shares put to you, why wouldn't you do this where appropriate? It gets even more interesting if they are European style settlement. Shares can only be put to you on one day.

There are so many ways to not have shares put to you, it really should never be a concern.

I'll go further, I sold the SPY March 186 calls, and bought the SPY 186 April calls. Dangerous trade right? Please explain to me how it is dangerous.

Puts have always been more favorable to me for selling because there is a large market for deep out of the money puts bought by more sophisticated traders as insurance. They buy, and hope they expire worthless. I sell and hope they expire worthless. And if you have a decent options platform, you can see exactly who is buying them from you, and you can figure out why. Especially in commodities.

Before a stock dividend, distribution, or ex-dividend date, selling options is almost like taking candy from a baby, as most don't understand what will happen to the underlying shares, and have no clue what the adjusted option might look like after adjustment. Except CBOE published exactly what it will look like.

Google, Click, Read. 10 minutes, Done.