Options call put example25 comments
Fx options online trading platform
Cash-secured put sales is an option strategy used by many smart investors as a way to buy stock cheap. Here is how it works. The stock has been in an uptrend. Here is an example. Since August, it has been heading up, making higher highs and higher lows. That could happen tomorrow, next month or maybe never. Meanwhile, as long as such an order was in place, funds would have to be reserved in your account for the purchase.
This would tie up the same amount of money, but there are two important differences:. The obligation would cease to exist on the option expiration date, November In that case, you would receive the shares of GLD. This could be a good thing or a bad thing depending on exactly where the price of GLD is at the time. If it is below, then you would have a loss overall. Cash-secured put sales are an effective way to build a portfolio at discounted prices.
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