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You can also sell in the money call options in anticipation the stock will go down. You keep the premium the call buyer pays.
by t1234s 3mo ago
You can also sell in the money call options in anticipation the stock will go down. You keep the premium the call buyer pays.
- mikestew 3mo agoBut to sell the calls, you should own the stock first. Puts can be bought w/o owning the stock. Granted, the put buyer pays the premium, so you don’t get guaranteed money in your pocket like you would selling calls.
- hiq 3mo agoI think you're referring to covered calls, but you can sell naked calls as well, meaning without owning the underlying.
- mikestew 3mo agoYou’re right, but the keyword in my post was “should”. If you have to look up “short selling” in the dictionary (as in OP’s case), naked options aren’t on the menu.