- November 26, 2017
- Posted by: marlenedubois
- Category: Home Health Aide Training
Naked Puts are supposed to be one of the riskiest strategies out there. although if done right selling naked puts can be even safer, as well as also more profitable than buying stocks.
When you sell a naked put you take on the obligation to buy a stock at a certain cost on or before a given date. because of which you bank a premium up front.
Selling puts can be a not bad strategy as long as you don’t go overboard. So if you sell naked puts on $50,000 worth of stocks, make sure you could buy $50,000 worth of stocks because you might have to follow through.
If you do which in moderation selling naked puts has the following advantages.
1. Stocks Don’t Need to Go Up
When you sell naked puts on stocks you do not necessarily need them to go up for you to be profitable. You only need the stock not to go down below your strike cost.
which allows you to make money when you are having trouble finding stocks which are about to move up. Instead of having to worry about which you could always sell puts.
2. You Can Get Paid to buy a stock
If the stock does fall down below your strike cost, you will have to buy which. although considering which you got the premium up front which means you got paid to get into a strong stock, which is actually much better than buying as well as also holding the old fashion way.
as well as also as long as the company carries a not bad long term growth you can just wait for which to go back up, as well as also sell covered calls on which to make even more premium.
3. Premium Adds Up
Collecting premium eventually adds up as well as also can be very profitable from the long term. Many times you can make more by selling puts then you can by holding the stock.