Here are five popular option selling strategies:
1. Covered Call Strategy
- Sell call options on underlying stocks or ETFs you already own
- Receive premium income from selling calls
- Limit upside potential, but reduce cost basis
2. Cash-Secured Put Strategy
- Sell put options on underlying stocks or ETFs you'd like to own
- Receive premium income from selling puts
- Obligated to buy underlying at strike price if assigned
3. Iron Condor Strategy
- Sell call and put options with different strike prices
- Receive premium income from selling options
- Limit potential losses, but also limit potential gains
4. Credit Spread Strategy
- Sell option spreads (call or put) with different strike prices
- Receive premium income from selling options
- Limit potential losses, but also limit potential gains
5. Naked Option Selling Strategy (not recommended for beginners)
- Sell call or put options without owning underlying
- Receive premium income from selling options
- Unlimited potential losses if underlying moves significantly
Remember:
- Option selling involves risk, including potential losses
- It's essential to understand the strategies, risks, and rewards before implementing
- Always set clear goals, risk tolerance, and position sizing
- Continuously monitor and adjust your positions as needed
Please consult with a financial advisor or conduct your own research before implementing any option selling strategies.
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