Trying to understand selling puts/calls. If I buy 100 stocks...
Trying to understand selling puts/calls. If I buy 100 stocks in a company, am I correct that I can sell a single put/call on the company? If price doesn't go down whoever bought my put loses their bet and I get to keep their premium? And then with a call, if someone thinks the company price is going to go up but it doesn't, they also lose and I keep their premium?
Then on the bad side, if the person buying is correct in their bet, I lose my 100 shares to them and they get to purchase at the strike price, or sell the contract that I just lost to someone who can afford to exercise? And then I'm just out of my 100 shares correct?
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s2t23 : you don't need the underlying 100 shares to short put/call....by selling these option, you earn premium but taking other party risk...so stay away if unsure....ie sell naked call can make you bankrupt...
三萬投資理財 s2t23: Yoo
quantitative gambler : nah it's margin trading like shorts , just buy calls/puts , you will get fked for selling
simplyZuan : you have been warned
MissCat : Watch some options wheel strategy youtube videos. you must be well versed in cash secured puts and covered calls strategy first before trying out.