Deep in the money put option 76


Deep in the money put option 76


This phrase applies to both calls and puts. More specifically, when one sells deep-in-the-money puts, it is equivalent to owning the corresponding shares as long as the stock price does not exceed the strike price of the options on their expiration date. The strategy exhibits certain advantages and suits well the profile of most investors that are interested in high-dividend stocks. It is particularly suitable for individuals that have their dividends taxed (see table at the end).The most important advantage is that the investor receives in full the time moneey of the options, which will be greater than the dividend if the strike price is properly selected.

Being in the money does not mean you will profit, it just means the option is worth exercising. This is pput the option costs money to monwy. This oprion beCall optionsIn the previous article we have explained why time value of at the money call options is higher than time joney of deep in the money call options (other factors being equal).

The reason is that the closer to at the money an option is, the more it limits your maximum risk from holding it, as there is less intrinsic value you can lose. While for monye options the lower the strike price the higher their intrinsic value is, for put options it is exactly the opposite. Its not day trading but its not buy and hold either, its the holding period that every Billionaire Hedge Fund Manager uses.Secondly, deep in the money call options, are a great way to trade stocks because they give you super leverage up to 20 times for little or no cost, yet with less risk than trading options outright.

Deep in the money put option 76 you have the right to sell anything above its current optioh price, then that right has value. That value is equal to at least the amount that your sales price is above the market price.




Deep in the money put option 76

Deep in the money put option 76

Deep in the money put option 76



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