Mark Wolfinger 14 Report post Posted February 11, 2014 Selling naked put options is often (mistakenly) considered to be a 'very risky‘ proposition. Professional stockbrokers who spread that message are doing their customers a major disservice, because they are steering those customers away from a prudent, profitable investment method. The only dangerous part of options trading is the risk-insensitive trader who buys and sells options with little or no understanding of just what can go wrong. The options, by themselves, are not dangerous tools. Click here to view the article Share this post Link to post Share on other sites
steven_e 3 Report post Posted February 26, 2014 selling naked puts for investors, allows an entry either at a lower price point than current price, or a profit from keeping the premium, if the option expires out the money. this way, an investor does not chase the stock price, but gets in at a point he/she has determined is favorable. margin required depends on your brokerage and the specific stock, with some momentum stocks costing more margin than a less volatile stock, at the discretion of your broker. margin can be reduced by buying a lower strike put, which turns the trade into a credit spread (bull put spread). This reduces the trade's yield, but percentage yield can be offset by more contracts, if one has a dollar goal for the trade Share this post Link to post Share on other sites
