tv1113 said:
Next question then, when do you actually lose significant money selling CC and naked puts? When premium gained is significantly less than the value lost through the stock price drop?
It seems like it's too simple to make money off of selling options, so what is the catch I guess
Clov example.
Say you sold Feb19 $12.50 puts for $1.50. Say that some huge investigative news is announced that takes stock to $4 on expiration day.
You don't notice, you get assigned because stock is sub $12.50. You are paying the share seller $1250. You previously got $150 for the put. Your out of pocket is $1100. You just got 100 shares of a $4 stock. You own $400 in assets, net loss $700.
There are ways around this ending, but you can certainly "lose" selling naked puts.
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B&I Key:
ETH - Extended Trading Hours --- RTH - Regular Trading Hours
ORH - Opening Range (1st 30min) High --- ORL - Opening Range Low
R1, R2, R3 - Resistance 1, 2, or 3 --- S1, S2, S3 - Support 1, 2 or 3
B&I Key:
ETH - Extended Trading Hours --- RTH - Regular Trading Hours
ORH - Opening Range (1st 30min) High --- ORL - Opening Range Low
R1, R2, R3 - Resistance 1, 2, or 3 --- S1, S2, S3 - Support 1, 2 or 3