Selling puts this month could be a boon if there is a small correction and volatility.
We will want to be aggressive put sellers into the buyback bubble that is blowing into year-end.
I am not too keen on buying calls right now, that seems a time for a bigger correction.
Selling covered calls on bigger positions that have RSI near 70 is always a good move.
You do things when the opportunities come along. I’ve had periods in my life when I’ve had a bundle of ideas come along, and I’ve had long dry spells. If I get an idea next week, I’ll do something. If not, I won’t do a damn thing. --- Warren Buffett
Each month, I will post a new set of option trades that you can look to make over the next month. I will focus on:
- Selling cash-secured puts on stocks that we would like to own and are approaching support.
- Covered call writing on stocks that are rallying but hitting resistance, so we can take some profits.
- LEAPs for gaining leverage on undervalued intermediate term growth ideas.
Always use limit orders and set your GTC for a week or two. Review a few times per week. It doesn't hurt to check early each morning after looking at the stock market futures.
You can adjust prices to be a few nickels, dimes or quarters more favorable. When selling options, you want to get the ASK or a little higher if possible on volatility. When buying options, you want to get the BID or a little lower if possible on volatility.
(note: if any prices look funny, ask, there's usually a reason, sometimes I made a mistake, usually, it has to do with expectations.)
Read more: October Options