Sharing my simple Sell Puts strategy
Quick sharing on my latest 2 Apple Put contracts.
On 10 June (Fri), when the market opened, Apple gapped down (as shown by Gap 1 in the image below). Then on 13 June (Mon), it gapped down again when the market opened.
On 10 June (Fri), when the market opened, Apple gapped down (as shown by Gap 1 in the image below). Then on 13 June (Mon), it gapped down again when the market opened.
Thoughts behind my trades
i have shared before, big movements (in either direction) give investors opportunity to make money.
When it gapped down on the first occasion, I saw it as an opportunity to sell a Put contract as I was of the view that it will bounce up. Hence I sold a Put contract, with 120 strike price, expiring 15 Jul.
On the second gapped down occasion, I was quite sure that the market had overreacted and Apple has high probability of bouncing back up. So I sold another contract, but to err on the safe side, I lowered the strike price to 110, and chose the 22 Jul’s expiry date.
Fast forward to today, Apple rebounded and it’s on its way to fill the gaps. Both contracts are in good shape now:
I wanted to close both contracts yesterday, but was busy and didn’t have the time. I may look at closing them next week for the following reasons:
1. Both contracts are giving me good profits after holding on for only 2 weeks
2. 1 contract has about 21 days to expiry, while the other has about slightly less than 30 days. Anything can happen within this period and Apple could fall back to 130s (it’s anyone’s guess).
That said, I may not close it if the rally continues to be really fierce, say example it fills the gap at 142, and headed towards 145. The message here is, have a plan in mind, but also be nimble to watch out for changes. Take profit if you’re uncomfortable with holding on to the contracts.
If I ended up closing both contracts, I’ll wait for the next opportunity to sell more Put contracts.
Disclaimer: This is not a financial advice. I am a newbie in Options trading haha. But I hope the above sharing is useful. To also highlight, this method of leveraging on gap-down scenarios don’t always work, and may not work for all stocks too. Please also look at other technicals of the chart.
To add on, not all options turned out to be what I want (expire worthless). I had a BAC contract assigned to me at 38 strike price, and the stock is current at 31-32. So I am holding 100 shares of it, and I will sell covered call to earn some premiums. I am also okay to hold it for the long term, together with Warren Buffet
Btw, if you have read till here, pls subscribe to my YouTube channel if you haven’t. Like my videos if possible too haha. Am hoping to reach out / help more people out there
Cheers and have a good weekend
$Apple(AAPL.US$
$Bank of America(BAC.US$
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BullyMoo :
Shuseido : Advice for Option beginners, only sell put for the stocks that you are perfectly fine to hold long term.
Cow Moo-neyOP Shuseido: That’s right !
impartial Narwhal_09 : I’m new here thank you broda!
Cow Moo-neyOP impartial Narwhal_09: You’re welcome! Hope its useful. And welcome to the moomoo family
icezzz : Thanks for ur sharing
Cow Moo-neyOP icezzz: You’re most welcome
APRoyalOak : Can advise how to play on option?
Cow Moo-neyOP APRoyalOak: I wish I could teach you just by typing here
It’s almost impossible haha. Therefore, I would recommend you to do some searches on Google and YouTube, and really spend some time and effort to understand. After which, if you have questions, you can post it here, I will answer if I can (or others can help too) 
APRoyalOak : Noted. Will text u if have any doubt. Thanks replying
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