Why Sell a Put (Unlimited Risk) When You Could Buy a Call?
★ SUMMARY ★
In this video you will learn when you should sell a PUT vs BUY a CALL – there are advantages and disadvantages to both, but in certain situations you may want to buy a call and others to sell a put.
We will go on screen and the risk analysis to show you the advantages and disadvantages of each option spread. By understanding the risks and defining your risk will determine which option spread you should place.
With selling a PUT you have unlimited risk, but a limited profit potential. When BUYING a CALL you have unlimited profit potential, but unfortunately the theta or time decay works against you.
If you are new to trading or investing – it is wise to evaluate the profit pictures so that you can see your risk in a visual format.
Posted at: http://tradersfly.com/2017/03/sell-put-vs-buy-call/
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Sir which is the best strategy n less Margin but profitable … not risky
Hey I have a question. Is it possible to buy a stock and lose it if the stock begins to drop even if it doesn't hit zero? And two is it possible to buy a stock for 10 bucks it drops to 1 dollars and still make a profit if it goes up 20 bucks
When Would you sell a call
yeah the problem is when trying to sell options with such a low probability of ending up itm you end up receiving very little premium and the risk is so large.. so you may have 80% win rate and then 20% of the time you end up ITM and wipe out all those months of wining in one trade..
Question: If I sell a MSFT put(weekly) at 125.00 and next week lets say stock price goes to 100.00, will I be automatically getting assigned 100 shares @125.00? What if nobody wants to assign those share to me? Will I lose my money?
Spaceba
How is selling a put unlimited risk? Is the risk not limited to the strike times 100 per contract? Even if the stock goes to zero, your loss is still limited to what you paid for the shares, minus the premium you collected for the put, correct?
You have the best videos. I love binge watching and learning from them.
NOT TRUE ! TOTAL B.S This video is NOT true at all. There is NOT unlimited risk at all. People coming online posting false info that traders rely on is a Travesty. Your risk is limited. Lets say a stock is $5 and you sell someone 1 contract (100 shares) for the $5 put and you sold it at .50 $50 you get to keep no matter what). They have the right to force you to buy it at $5 period. So if the stock goes to $10 you would not be assigned end of the contract. However, If the stock went to zero ( this is worst case) you still would have to buy it at $5 THAT is your risk $500 for 1 contract minus the .50 premium you collected ($50) that you get to keep. So total risk is $450 in this case. So the true answer to this question is selling a put generates income for you where buying a call does not. What a false video.
Easy way to explain something a little complicated to us the beginners. Tks a lit✅
Awesome awesome awesome
Thanks for sharing Sasha
If you're profiting on a Put or Call, I don't understand how time decay on an option makes any bit of difference
I don't get why people only consider selling puts, when you can buy puts. I have yet to see YouTube talk about that.
sir what is defference between put buy or call sale
sir please make one video on whether i am put buy or call sale… i am confusing….
I just love this part about options and that's selling options………..all I do is sell puts,verticals and at times some iron condors…………the reason ,I revisit your videos is that it keeps me in check and I thank you from the bottom of my heart ,I have learned so much over the years watching your videos…………….
this explained it very well. thank you!
What if you don't have the funds for an assignment? I understood everything about this video except for when it comes to assignments and how that put you bought at 115 covers the risk of assignment
When I watch your videos, I click like first, then I watch it. I know it will be good
I Sasha, I have a question, You mentioned in this video that you would have unlimited risk to the downside if you sold a naked put. My question is, wouldn't the loss be limited by the stock going to zero? For example if I sold a naked put on a stock that was $10 and I sold the $10 put strike, wouldn't my loss be limited only to $10 since the stock could only go to zero? I could see if you sold a naked call how your loss would be unlimited since the stock could technically rise to infinity. Thanks for your video's very helpful.
Thank you for your information. It was very helpful in learning options.
Very informative, thank you
Selling Put Options during high volatility (expire 1 week) = Legal Robbery.
Another great video Sasha, you are totally right about losing money every time when you buy naked options. I been losing for 6 months now since I began trading options. Good thing I found your channel.
I do have little question…….on this video you mention sell put at 120 and buy put at 115, where do I actually start losing money? Thank you
How about selling a call?
Great video Sasha, thank you!