I'm not sure I follow all of your message. I understand you sell
half and keep the rest as house money. What do you mean sell a
short option further down? You sell your current options and buy
another set ?
I'm relatively new to options so any strategy that works for
anyone on the blog would be interesting for me as well as any
recommended readings on the subject. I found very good
material how to trade/analyze the market by reading
material from Mike Swanson (wallstreetwindow.com who actually
made me discover BPT) and the continuing newsletters from BPT. I'm
still looking for good readings/ressources for options.
With my recent discovery of freestockcharts.com, I can finally
make my own charts and even set email alerts, this will help me
prepare better setups and triggers.
All I am saying is that if you are long ABC company
of a 50 put at 1.00 and ABC moves to 47.50 you can take
off 1/2 and play with the houses money... or you can sell a short
put against it at lets say 45.00 strike for
1.00 now.... you lock in your "cost"
but limit your profit. It is similar to a
covered call in reverse... A covered
put. To me.. options are not
like stock.. but they are worth money... I like to cash flow
my options if possible once they are
profitable. I usually sell shorts beyond a
support or resistance point if I can get enough money for
them. Hope that makes sense?
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Options trading readings
PGN - Stop hit took a wee loss with div...
Posted by atlantis on 7th of Jan 2011 at 08:22 am
Hi Zach06 and everyone trading options
I'm not sure I follow all of your message. I understand you sell half and keep the rest as house money. What do you mean sell a short option further down? You sell your current options and buy another set ?
I'm relatively new to options so any strategy that works for anyone on the blog would be interesting for me as well as any recommended readings on the subject. I found very good material how to trade/analyze the market by reading material from Mike Swanson (wallstreetwindow.com who actually made me discover BPT) and the continuing newsletters from BPT. I'm still looking for good readings/ressources for options.
With my recent discovery of freestockcharts.com, I can finally make my own charts and even set email alerts, this will help me prepare better setups and triggers.
Thanks !
Atlantis
Atlantis and Options
Posted by zach06 on 7th of Jan 2011 at 08:42 am
All I am saying is that if you are long ABC company of a 50 put at 1.00 and ABC moves to 47.50 you can take off 1/2 and play with the houses money... or you can sell a short put against it at lets say 45.00 strike for 1.00 now.... you lock in your "cost" but limit your profit. It is similar to a covered call in reverse... A covered put. To me.. options are not like stock.. but they are worth money... I like to cash flow my options if possible once they are profitable. I usually sell shorts beyond a support or resistance point if I can get enough money for them. Hope that makes sense?