Making money selling weekly stock options,best trading platform for penny stocks,foreign exchange rates history average - Reviews

13.04.2015 admin
Today I want to look at a few simple ways to increase your odds of making money from selling options. A common way of choosing stocks and strike prices for option selling is to focus on undervalued stocks and prices in which an investor would be willing to own the stocks. Fortunately, the market sends signals through price action that can guide an investor in choosing stocks and strike prices for option selling.
Hey Greg, there are income oriented closed end funds that implement covered call strategies to generate monthly distributions. By selling options you make money when the stock goes sideways or up (or even slightly down).
Stocks hit price areas where they experience resistance on the way up and support on the way down. The biggest problem with focusing on value is that an investor’s estimate of value in a stock can often be quite wrong.


You can extend the approach to include technical indicators such as RSI, MACD, Stochastics, etc.. The strategy is simple enough but obviously the success of the strategy is dependent on which stocks you choose and the strike prices for the options. By learning how to read some simple price signals and investor can increase their odds of making money from selling options.
Also, the premium for 2 one month options on a stock is higher than the premium if you sold one two month option.
An even more strict criterion is to have both SMAs rising but I will accept less especially when a stock in reversing a trend. Sure, a trend can reverse but momentum is one of the most powerful forces in the market.  Lets take a look at an example where it was almost impossible to make money selling options. Stocks will often pull back at key resistance levels which will negatively impact your option position.


Lets take a look at a very recent example of using a support level to initiate an options position. I can make a compelling argument that book value for the stock is least $5 and was through the whole time frame of this chart. What is hard for many investors with such an approach is that often waiting for higher prices in a stock increases your odds of making money.



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