The Cash Secured Put Sale
The next conservative and dependable income-generating option strategy we will examine is the cash-secured put sale. In simplified form it works like this: Have sufficient cash in your account to secure the possible purchase of a stock or ETF. Sell an out-of-the money put(s) (One put contract for every 100 shares) Receive a premium for selling the put(s) Wait for the option to expire. If it expires out-of-the-money you will own the premium free and clear. If it expires in-the-money the underlying stock or ETF will be “put” to you. You will buy it with the cash that was secured when you sold the put. Consider the landlord analogy again: You are the landlord. The cash you have is your property. The premium you receive by selling the put is the “rent” you receive on your property. For additional details click on:
Details about Cash Secured Puts
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