Replies to post #573 on Option Education

[Newly2b]

I think what it comes down to is your goal. If your goal is to acquire more stock, yes, sell the ITM Put (I often sell a Put when I want to own a stock at a particular price -- if it's ITM at expiry I get put the stock, if it is OTM, I still get to keep the premium I received and can do it again until I get put the stock at my price). OTOH, if your goal is to maintain your position in a stock for the long-term while still earning some money on a non-dividend-paying stock, sell an OTM Call at a strike you can live with if it is hit.

Newly

[Toofuzzy]

Bbluck

Part of that $155 is not really a premium. It is the difference between the current price and the strike price of the put. You will get slightly more actual premium by selling SLIGHTLY out of the money puts. Sell puts at a strike price just below the current price. The further out you go in time the greater the premium, though if you could keep selling monthlies without getting hit you will make more over time not counting the multiple commisions.

I like to go 6 months to a year out.

Toofuzzy