When Opportunity Knocks – Answer

Of the thousands of stocks that offer options, how many offer opportunities daily? The short answer is that every optionable stock provides an opportunity, and the challenge is to narrow the field to a select few. What do you know about the stock you own or are researching for an options trade? Here is another way to make things more complicated. What makes a stock “good” or “bad” for trading?

Golden Rule #1
ONLY SELL PUTS ON A STOCK YOU ARE WILLING TO OWN!
Source: Billionaire Stock Trader

The most obvious way to begin is to add your stocks to your list. Beyond that, your decisions are subjective. To track a recommendation made by the “Billionaire Stock Trader” newsletter, we will analyze KSS (Kohls) here.

Today, we sell the July 19 expiry $22.50 PUT for $95. If we are assigned the shares, our effective price will be (22.50-0.95=21.55) $21.55 per share. If we don’t get the 100 shares, we keep the $95.00 premium. If we get the shares, we will sell a CALL.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top