Monday, November 8, 2010

Bullish Put Options: A good way to buy stocks

Last week I talked about how to buy call options in order to take advantage of rising stock prices without having to buy the stock outright. This week I want to talk about another way to take advantage of a bullish move on a stock. This strategy is called writing put options. A broker will tell you that this is very risky. However, with a good understanding of risk management any investor can become proficient at writing put options without losing his shirt. You can see the entire post at: www.optionalpha.com/blog. If you had taken my suggestion on the post about writing the Jan 2011 $280 puts, you would have a profit of about $400 right now. In one week!