New subscriber here. Very much enjoying your work and how you share your thought process for each decision. Thanks for putting in all the time to write articles like these...i know that's not easy (or quick). Cheers!
@ U.N. Owen. As my spreadsheet shows, the average MOS is 6.7%. And the average probability of the stocks closing OTM when the puts expire is 81.4%. The average delta is -16%.
I sold CAT puts with 7.5% and 11.6% MOS, which should be safe for 10-day trades unless the market collapses. My DOW MOS is 8% on 30- and 24-day trades. I'm more interested in buying more DOW shares at those strikes than I am interested in buying CAT at $225 and $215. I'd like to buy CAT at around $200 to $210. I had it called at $210.
JNJ is not very volatile so I sold its CSPs at a 3.8% MOS and a fairly safe -19% delta.
Each trade reflects my desire to buy a stock at the puts strike. The more interested I am in buying the stock, the lower the MOS and the OTM.
Is that how you trade puts? I'm looking to sell puts on a few more bullish DJIA stocks on this dip, but I'm not sure when I'll do that.
The Options Bible recommends that CSP Puts be sold in 45-day trades with about a 10% MOS. I prefer 15% to 20% MOS for 45-day and longer trades.
Hey Don: How far OTM did you sell these puts? Dividend blue chips have held up pretty well last year and should continue to do well assuming rates remain high and we sidestep a complete economic meltdown.
New subscriber here. Very much enjoying your work and how you share your thought process for each decision. Thanks for putting in all the time to write articles like these...i know that's not easy (or quick). Cheers!
@Jason Milton. Thank you.
@ U.N. Owen. As my spreadsheet shows, the average MOS is 6.7%. And the average probability of the stocks closing OTM when the puts expire is 81.4%. The average delta is -16%.
I sold CAT puts with 7.5% and 11.6% MOS, which should be safe for 10-day trades unless the market collapses. My DOW MOS is 8% on 30- and 24-day trades. I'm more interested in buying more DOW shares at those strikes than I am interested in buying CAT at $225 and $215. I'd like to buy CAT at around $200 to $210. I had it called at $210.
JNJ is not very volatile so I sold its CSPs at a 3.8% MOS and a fairly safe -19% delta.
Each trade reflects my desire to buy a stock at the puts strike. The more interested I am in buying the stock, the lower the MOS and the OTM.
Is that how you trade puts? I'm looking to sell puts on a few more bullish DJIA stocks on this dip, but I'm not sure when I'll do that.
The Options Bible recommends that CSP Puts be sold in 45-day trades with about a 10% MOS. I prefer 15% to 20% MOS for 45-day and longer trades.
Hey Don: How far OTM did you sell these puts? Dividend blue chips have held up pretty well last year and should continue to do well assuming rates remain high and we sidestep a complete economic meltdown.