Sell Put option strategy (Tesla & Apple)
Sold these 5 Put option contracts when market was fearful over the last 1 month. Basically, went bullish when everyone was bearish. As the famous saying goes, be greedy when others are fearful.
And these options are printing now 🙂
Have used some basic technical analysis to aid in my option trading and selection of strike prices. Do watch my Youtube video if you have time, and would be great if you could help me hit 500 subscribers haha![]()
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. Thank you!
And these options are printing now 🙂
Have used some basic technical analysis to aid in my option trading and selection of strike prices. Do watch my Youtube video if you have time, and would be great if you could help me hit 500 subscribers haha
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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71389636 : You just stated you went bullish when everyone else went bearish. Yet these are put. Care to expand on your statement?
Cow Moo-ney OP 71389636 : In a transaction, there is always a buyer and a seller. A buyer of a Put contract is bearish, while a seller of a Put contract is bullish. And I was the latter. Hope that clarifies.
Shuseido 71389636 : He sold, not buy.
102504912 : Hi cowmooney. A buyer of Call Option is bullish on the market. You are also bullish and chose tp be a seller of a Put option. Can share what is the reason/rationale you chose this method ? is it cause you get the money/premium upfront id u are the seller of the put, but if you choose the buyer of call option route, then you can only wait for money to come in at a later point intime when market turns bullish ?
Another question: your put option is not covered right ? no ready stock in yr account right ?
Cow Moo-ney OP 102504912 : Hello, thanks for the questions. I chose selling puts over buying calls (both bullish moves) for couple of reasons.
Firstly, buying calls is a more bullish move than selling puts. For selling puts, even if the price is flat, or slightly lower than the time I bought it, I’ll still profit from the trade. In this bear market, I wouldn’t want to go for the more bullish move. Secondly, it’s the time decay. I like to make friend with time instead of having it to go against me. Thirdly, it has to do with my option strategy - which is the widely popular Wheel strategy.
Selling Put option needs to be covered by cash, not stocks. And yes, it’s covered, I have cash on standby in case I get assigned with the stocks. Do note that the stocks that I sold Puts for are stocks that I don’t mind owning for long term
102504912 Cow Moo-ney OP : thanks for your answer. very educational for me. But can you explain in detail abt the time decay part ? do you mean buyer of call option experience time decay , but seller or put option experience it less ? thank you so much in advance !
Cow Moo-ney OP 102504912 : For every option premium, there are intrinsic and extrinsic values. Extrinsic value consists of time value. Over time, this value will drop/decay. In other words, if you bought a Put at $2 premium (aka $200), and if everything else is constant, come expiration date, this contract will worth lesser than $2 because the time value has decayed.
Therefore, as a seller of an option (be it Put or Call), time is your friend. If the stock doesn’t move in the direction of what the buyer wants, time decay will cause their option value / premium to drop
BeBlessed : congrats! huat ah!
Cow Moo-ney OP BeBlessed : Haha thank you
BeBlessed Cow Moo-ney OP : Ppi was good.. hmmm what causes e sell down? did I miss any impt data? just cut loss at usd80 as I long DJ.. lolol
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