7 Tips for Mastering Put Selling

An attractive strategy for both options and stock traders

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Tip #3 - Higher Premiums Don’t Guarantee Bigger Profits

gaurantee 7 Tips for Mastering Put Selling

Don’t get seduced by higher option premiums, thinking that more premium automatically translates into higher profits.

There’s a reason why premiums are high (or low). Higher premiums usually mean higher expected volatility (the propensity for a stock to move up or down) and declines could be drastic. And that could quickly put you into a steep losing position.

While there is room for error with put selling, it’s still important to have a good handle on the short-term direction to keep your put out of the money.


Article printed from InvestorPlace Media, http://investorplace.com/2011/08/put-selling-tips-for-writing-put-options/.

©2014 InvestorPlace Media, LLC

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