Friday Update

Friday Update Hello Smart Option Sellers! Happy Friday! Not much new to report since yesterday's alert. Looking forward to Thanksgiving next week, and it'll probably be a bit slower than normal. Fine with me, as I can use a break from this volatility. The markets continue to churn back and forth with a slant to the downside. We're just biding our time with our put-sell positions. All of them expire in December & January (except AMD - February), so the time decay will start to ramp up. This helps the put option prices decline faster as expiration draws near. That's a good thing! Continue to sit tight and hold everything as-is. Q&A Only one question this week. Q: I have been a subscriber on naked put selling with you for many years and very satisfied with the results! I am considering doing short term naked put selling,say 30/45 days.I would appreciate your comments,both negative and positive on this approach. A: I applaud your efforts to further utilize this fantastic strategy. Selling shorter-term options can have both pros and cons. Pros: - options prices decay much faster - can engage multiple times throughout the year - less time for the stock to fall through the strike price Cons: - need to sell higher strike prices to earn a decent premium (closer to the stock price) - less cushion for downside pull-backs - possibility of assignment is higher - higher strike prices lead to larger margin requirements For me, the biggest issue would be having less downside cushion. Just based on the nasty sell-off we've had in October, is enough to make me want to use longer-dated options for that fact alone. More time to expiration = larger downside cushion. Up to you though. Selling put options in a bull market is the best scenario. If we get back into that mode, using shorter expiration dates at that point will be less stressful. Good