4/09/2020 DIA cash secured PUT May 1st
Put trade:
At the moment I don't have any long position, so I can not sell covered calls, yet I don't like idea of money sitting on the sideline and not working for me.
I decided to try to sell cash secured DIA put option.
How does it works ?
I am selling cash secured May 1st $215 strike put option for $420 premium, that means, if price falls below $215 between now and May 1st, I will be forced to buy 100 shares of DIA stock at $215 per share for total $21,500.- $420 premium I already collected, so my basic cost per share will be $210.80.
If option get exercised at $215 and I end up holding 100 shares of DIA,- what can I do next?
I can sell covered call for another premium $xxx .
If stock stays above $215, I will keep $420 and rest of cash.
P.s. This is another training trade (try and Dry), no real money risked here .
At the moment I don't have any long position, so I can not sell covered calls, yet I don't like idea of money sitting on the sideline and not working for me.
I decided to try to sell cash secured DIA put option.
How does it works ?
I am selling cash secured May 1st $215 strike put option for $420 premium, that means, if price falls below $215 between now and May 1st, I will be forced to buy 100 shares of DIA stock at $215 per share for total $21,500.- $420 premium I already collected, so my basic cost per share will be $210.80.
If option get exercised at $215 and I end up holding 100 shares of DIA,- what can I do next?
I can sell covered call for another premium $xxx .
If stock stays above $215, I will keep $420 and rest of cash.
P.s. This is another training trade (try and Dry), no real money risked here .
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