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re: Visa getting roughed up today?
Posted on 8/2/13 at 9:47 am to Ace Midnight
Posted on 8/2/13 at 9:47 am to Ace Midnight
I don't know how many shares you guys trade, but I had read alot and finally dove in and I've been selling puts for the last maybe 2 months and the money is eye popping, the downside is its 100 shares per contract BUT I just sold the visa $185 put for next friday at $185 and got $6.05/share for it. At that point there are 2 options
1.come next friday either I buy visa for $185(which i dont mind) and keep $6.05 in premium effectively making my buy price $178.95
2.visa is over $185.01 next friday's close and I keep my $605/contract and move on to the next. $605/week on an $18,500 investment is pretty damn good in my book, that's over 3% in a week!
3.The option increases in value as time decays and i close it early for a profit.
I can't believe i only got into using these recently but wow the ROI is fantastic and you either buy shares at a price you want or profit the premium. Once you establish a trading range for a stock, I think puts can be lethal for making consistent weekly income, but 100 shares at a time probably throws off a few people.
1.come next friday either I buy visa for $185(which i dont mind) and keep $6.05 in premium effectively making my buy price $178.95
2.visa is over $185.01 next friday's close and I keep my $605/contract and move on to the next. $605/week on an $18,500 investment is pretty damn good in my book, that's over 3% in a week!
3.The option increases in value as time decays and i close it early for a profit.
I can't believe i only got into using these recently but wow the ROI is fantastic and you either buy shares at a price you want or profit the premium. Once you establish a trading range for a stock, I think puts can be lethal for making consistent weekly income, but 100 shares at a time probably throws off a few people.
This post was edited on 8/2/13 at 9:48 am
3
Posted on 8/2/13 at 9:51 am to ThaBigFella
quote:
100 shares per contract
For me, 100 shares of V would be my whole stash.
Posted on 8/2/13 at 9:51 am to ThaBigFella
That stuffs over my head. Want to learn more though. Recommend a good read?
This isn't my day job by any measure though, However I have crushed it this year (for me at least)
Want to learn more though. Recommend a good read? This isn't my day job by any measure though, However I have crushed it this year (for me at least)
This post was edited on 8/2/13 at 9:52 am
Posted on 8/2/13 at 9:54 am to ThaBigFella
I think some people don't understand that the fact that you don't ever actually have to have the capital to purchase the 100 shares. You can just leverage way more for your money without have to plunk down 19000ish dollars on physically buying 100 shares. If you know what you are doing with options, there is plenty of money to be made without being greedy. Even the best only hit about 1 in 3 options in the money, but that 1 is way more than enough to cover what you paid on the other two.
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