Comments on: Trade - Sell SUCTC (Naked Put)

By: ETF Covered Calls - Dedicated to searching for optimum returns on Exchange Traded Funds via Covered Calls » Trade - Buy To Close SUCTC

Tue, 05 Aug 2008 18:57:15 +0000

[...] Trade - Sell SUCTC (Naked Put) [...]

By: John

John — Tue, 22 Jul 2008 04:54:51 +0000

Thank you for explaining. Now I got the trade.

By: RichSlick

RichSlick — Sun, 20 Jul 2008 14:34:18 +0000

In respect to SUCTC, that’s August $55 put so I’ll need to wait till August 16th to find out if I’ll need to buy SSO at $55. If not, I keep the premium money. If so, then I’ll own 200 more SSO at $55.

By: RichSlick

RichSlick — Sun, 20 Jul 2008 14:32:17 +0000

Yes, you can sell naked puts on the same stock/etf at the same time as selling covered call.

To Sell a Naked Put. You look at the PUT OPTIONS on a table. In your brokerage account, you want to select SELL TO OPEN to sell naked puts. (Note: it’s SELL TO OPEN to sell covered call too).

When you sell a naked put with a particular strike price, you are committing yourself to buying that stock at that strike price IF the stocks falls BELOW (or AT) the strike price.

When I sold SSOSM (July $65 strike) I committed myself to buying SSO at $65 if SSO fell below $65 on options expiry. This past Friday, SSO closed at $59.37 so I’ll be forced to buy SSO at $65. When selling naked puts, you need to be sure you keep cash reserves in your account to either close out your position or handle an assignment.

By: John

John — Sun, 20 Jul 2008 05:25:48 +0000

I understand how you sold the 2 SSOGO July calls as this is a covered call. But can you also sell the Puts on the same stock? I have been following your website closely but csn you explain this trade a little more, since I am a newbie.
Are these puts - Sell to close?