Option is a contract in the future to buy or sell a stock at agreed price (strike price). Options are used to hedge (insurance). (detailed explanation for beginners)
Other uses:
Buying PUT option – betting that stock will go down.
Buying CALL option – betting (with leverage) that stock will go up.
The new concept that I have been introduced by Michael is Selling PUT options
Selling #Options is one of the best ways for investors with larger portfolios to generate #CashFlow. It’s like getting paid for having limit orders in the market. Time works in your favor. I’m selling cash-secured puts and covered calls on a monthly basis to generate income. 💰 https://t.co/p87yNwJbdL
— Michael Hebenstreit (@m_hebenstreit) December 3, 2022
- Choosing the right stock
- Setting the strike price and expiration date
- Placing the trade
- Managing the trade
- Conclusion
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