Instead of buying 100 shares with 2500 you can get 100 shares potentially cheaper. If you sold a put on the $25 that would have 140 days until it expires (jul 16 2021) you would get paid $580 dollars (5.80 x 100 shares) to have the shares "PUT" to you for selling the put. If it never gets to $25 in the next 141 days it will expire worthless and you keep the $580. (actually you keep the $580 no matter what happens) So doing the math:
You put up $2500 to secure your put
you then sell a put and receive $580 immediately
$2500
$ 580
$ 1920 is the net you paid to control 100 shares vs. just shelling out $2500 flat out and buying.
Basically $2500 worth of stock at a 24% discount.......
Once you control 100 shares you can then start selling CALLS at higher strike price i.e. $40,$50 call strikes) that expire 45days to 6 mos out. Keep collecting premiums until you are Called out at your strike and then repeat the whole process again.....either with the same stock if its in your price range or another ....
CCIV
When it comes to the chart notice the MACD at the bottom and the two red candles this is a clear trend reversal indication along with the RSI being in a perfect oversold position. the two dotted lines on the RSI give you indication on whether you should consider selling or buying ....since it in a low signal of course this is a good signal.
Do your own due diligence this is not a trade recommendation more so a way you can see price action and what strategies you can use to profit in the market regardless of direction.
You put up $2500 to secure your put
you then sell a put and receive $580 immediately
$2500
$ 580
$ 1920 is the net you paid to control 100 shares vs. just shelling out $2500 flat out and buying.
Basically $2500 worth of stock at a 24% discount.......
Once you control 100 shares you can then start selling CALLS at higher strike price i.e. $40,$50 call strikes) that expire 45days to 6 mos out. Keep collecting premiums until you are Called out at your strike and then repeat the whole process again.....either with the same stock if its in your price range or another ....
CCIV
When it comes to the chart notice the MACD at the bottom and the two red candles this is a clear trend reversal indication along with the RSI being in a perfect oversold position. the two dotted lines on the RSI give you indication on whether you should consider selling or buying ....since it in a low signal of course this is a good signal.
Do your own due diligence this is not a trade recommendation more so a way you can see price action and what strategies you can use to profit in the market regardless of direction.