With options expiration upon us — or at least the monthly version of it — it’s a good time to look at selling naked puts for March expiration.
If possible, I like selling naked puts about a month out, because if I can get a 1.7% to 2.5% premium on them, then they make for a very nice annualized return. This is one of the strategies I’ll be using to enhance income for my forthcoming stock advisory newsletter, The Liberty Portfolio.
Remember, you are selling naked puts, and that means you are selling the right for another investor to sell (or “put”) a given stock to you at a given strike price on or before a given expiration date of the contract.
So if you get the stock put to you, be certain it’s a stock you actually want to hold.