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If you are selling options (rather than buying), the price decay works in your favor.I think of selling a put option as just like placing a low ball buy order in the market,Eg, if CBA is currently $80, but I want to buy them at $70, I can sell a put with a strike price of $70 and collect $1.If the share hits $70, I get my buy order filled if it doesn’t I get to keep the $1, and write another put and collect another $1.I see my options program as just being a part of my investment program, eg I am just using put options to place orders I companies I want to buy, and being paid to wait for them to drop.
If you are selling options (rather than buying), the price decay works in your favor.
I think of selling a put option as just like placing a low ball buy order in the market,
Eg, if CBA is currently $80, but I want to buy them at $70, I can sell a put with a strike price of $70 and collect $1.
If the share hits $70, I get my buy order filled if it doesn’t I get to keep the $1, and write another put and collect another $1.
I see my options program as just being a part of my investment program, eg I am just using put options to place orders I companies I want to buy, and being paid to wait for them to drop.
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