In the past 7 months, I have gained a lot of exposure to trading options. I started getting my feet wet when I started this blog. But now, I have tested with and tried to understand the price movements of options in relation to the movements of underlying stock, and how it ties together with the time value, etc....
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I tested another strategy today. Called the Buy-Write. In this strategy, trader buys a stock and simultaneously sells the options for the stock. If the options expire, trader keeps the premium and stock, else trader keeps the premium and sells the options as strike price. Pretty simple in principle. This post will only be discussing the buy-write strategy....
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I am getting very confident about the covered call strategy, the more I think about it. I wrote 2 more covered calls today. KO and T, just out of the money. Fingers crossed. T was going down and KO was moving up. The call of KO is sept 27 and call for T is sept 20....
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I did my first options trade today. I have been studying the theory since some time. While executing it, I was wondering all the time that why did I not try this earlier. It seems safe. Actually, a good way to generate income if you understand how this works....
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