4 ms·
How do you pick dates and prices on the options?
by doopy1 4y ago
How do you pick dates and prices on the options?
- giantg2 4y agoThe answer will depend on who you ask and what your goal/strategy is. There are numerous places like TastyTrade that go over picking dates and price points.
- vivegi 4y agoIdeally, for this strategy, the PUT is an insurance, so you can buy the longest available period that is priced optimally. The sold CALL is nearest-date expiry. After the CALL expiry date, you sell another CALL option and repeat this until the PUT option that you own expires (upon which you can buy a new PUT option and continue the strategy). You collect dividends on the underlying + the premiums on the sold CALLs. Your long-term profit would include the dividiends + CALL premiums - PUT option purchase price while being protected from drops in the stock value. In the event of a sold CALL or PUT exercise scenario, you also have capital gains adding to the profit.