I’m learning options right now and it seems pretty safe. Correct me if I’m wrong.
I understand the loss potential when selling puts and calls, but after all, if you do the things right, it is not that risky.
For example, if I believe in INTEL, and I own about 100 shares (48 avg price) and this company is long-term hold for me, why wouldn’t I sell puts with a strike price of 46+- and sell calls with a strike price of 50+- with 1-2 weeks expiration if I believe this will be in that range?
If it hits 46, good I’m happy to buy 100 shares more at 46. But if not, great I’ll just keep the Premium.
And if it hits 50, good, I made profit of 2$ per share and sell it for 50$. If not, great I’ll keep the Premium.
If it bounces hard, dang it, I just move to another long-term stock or buy it back in the 50’s if I still love the company.
What do you think?
Wish I knew it before I bought PayPal and Facebook, just could have buy puts on these and maybe save some money.
I know that there are many strategies for trading options, but I think selling puts and calls is enough for me.
And by the way, sorry for my English.
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