This article will outline one of the more common options strategies: cash-covered puts. The strategy is created to have no upside risk, which is done by collecting a total credit greater than the width of the short call spread. A Jade Lizard is a slightly bullish strategy that combines a short put and a short call spread. Choi doubled his Roku winnings by buying more puts, this time on the S&P 500 exchange-traded fund. We discussed its mechanism as well as walked though a real-life example. ELI5 – Explain like I’m 5 (years old) This one is often seen on Reddit. The big questions are - the scale of what they were doing and are they selling puts to buy calls - … The ins and outs of selling options The buyer of options has the right, but not the obligation, to buy or sell an underlying security at a specified strike price, while a seller is obligated to buy or sell an underlying security at a specified strike price if the buyer chooses to exercise the option. Buying options when IV is 55 and selling when it is 30 is a sure way to lose money. It’s used to ask for a simple explanation to a complex topic. This puts you at an average profit of $50/day. If IV had declined only to 50, the call would be worth an additional $1. When the SPY fell to $295.87 on Sept. 24 -- the … Options are divided into two categories: calls and puts. Selling puts on quality stocks, and ETF’s (which I will now refer to as equity/equities) I would be happy to buy is one way to earn guaranteed weekly or monthly income. Here is a look at how to sell options, and some strategies that involve selling calls and puts. Watch an overview of put options, the right to sell an underlying futures contract, including the benefits of buying and This puts you at an average profit of $50/day. Selling 2 puts ATM has approx +1 delta, so they counter that by selling short 1 stock of the underlying, giving them a ~0 delta exposure. “ELI5, how does wind work?” ESP – Email service provider A program or software that allows But the implied volatility was crushed to 30, and that 'extra' dollar' was "If SoftBank was selling puts its a very dangerous strategy. Selling cash-secured puts is arguably a very lucrative strategy. That's a very ELI5 explanation - it's not as easy as I outlined and there is a lot of readjustning needed to stay neutral. Yes, this is a positive expected value bet (you obviously won’t agree to this if … Ex. ELI5: ETF Basics By Herman Ye October 13, 2019 Last week, we talked about how ETFs are not breaking the market. Selling 2 puts ATM has approx +1 delta, so they counter that by selling short 1 stock of the underlying, giving them a ~0 delta exposure. Puts and calls are short names for put options and call options. An arm's length transaction is one in which both parties are acting in their own best interest. Remember that this is simply an average (or the expected value). Yes, this is a positive expected value bet (you obviously won’t agree to this if … A cash-covered put is a 2-part strategy that involves selling an out-of-the-money put option while simultaneously Calls increase in value when the underlying security is going up, and they decrease in value … By the time it happened, theta would have made your positions not When you own options, they give you the right to buy or sell an underlying instrument. Options Guy's Tip Don’t go overboard with the leverage you can get when That's a very ELI5 explanation - it's not as easy as I outlined and there is a lot of readjustning needed to stay neutral. $ 50/day the market remember that this is simply an average ( or the expected value.! Remember that this is simply an average ( or the expected value ) and.! 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