🔴RETAIL INVESTORS DO STOCK OPTIONS COMPLETELY BACKWARDS...
(Here's why)
When the market is falling. Retail investors want to BUY puts. That bids up the put premiums. That makes puts more expensive. They are buying puts as the market is getting cheaper and safer (falling) They do this at the complete wrong time usually.
But us? We will use this to our advantage. Instead of being like the herd & buying puts when things are falling and becoming cheaper/safer. We will SELL puts for top dollar to them as they are emotional and panicking. The sold puts will be 1+ year in duration. (SAFER, EASIER, MORE REPRODUCIBLE, MORE CASH FLOW WHEN CHEAP TO REINVEST)
So, we collect max premium and reinvest that back I to the company we are bullish on.
These puts are not cash secured. They are portfolio secured.
If you are bullish, why would you want all that cash laying around doing nothing... DUMB.
Keep ratios in check and you can withstand any bear market. I have been doing this for a decade through many cycles. IT WORKS.
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
🔴RETAIL INVESTORS DO STOCK OPTIONS COMPLETELY BACKWARDS...
(Here's why)
When the market is falling.
Retail investors want to BUY puts.
That bids up the put premiums.
That makes puts more expensive.
They are buying puts as the market is getting cheaper and safer (falling)
They do this at the complete wrong time usually.
But us? We will use this to our advantage.
Instead of being like the herd & buying puts when things are falling and becoming cheaper/safer.
We will SELL puts for top dollar to them as they are emotional and panicking. The sold puts will be 1+ year in duration.
(SAFER, EASIER, MORE REPRODUCIBLE, MORE CASH FLOW WHEN CHEAP TO REINVEST)
So, we collect max premium and reinvest that back I to the company we are bullish on.
These puts are not cash secured.
They are portfolio secured.
If you are bullish, why would you want all that cash laying around doing nothing...
DUMB.
Keep ratios in check and you can withstand any bear market.
I have been doing this for a decade through many cycles.
IT WORKS.