facebookWhat do you feel about options trading? It seems not bad as it costs lower than owning the stock outright and yet with higher returns. - Seedly

Advertisement

Jar

07 Jun 2019

Events

What do you feel about options trading? It seems not bad as it costs lower than owning the stock outright and yet with higher returns.

Discussion (3)

What are your thoughts?

Learn how to style your text

Thanks Jonathan. Do u put aside funds ready in case the sold puts get exercised?

View 1 replies

About 80% or more of options expire worthless. So it's better to sell options on stocks to gain income and aim to have the options contract expire worthless. I deploy bull put spreads for this and aim for 40% returns or more a year.

However, if you are confident in the direction of the stock, you can buy the put or call option and wait. You need to be 100% right to make money this way (in stock direction, strike price and price to pay), as there's time decay in the option price and the option price will decrease, especially when the stock price is going against your position. But when you are right, it can be possible to achieve a few hundred percent or more.

Overall, selling options will allow you to achieve more consistent income and returns over the long run.

Write your thoughts

Advertisement