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Option Strategies For The Value Investor – Part I (Writing Put Options)

|Includes: Ensco PLC (ESV)

 In this first post, I present my favorite option strategy – Selling Put Options. Please read on and I am sure you will find it interesting. I will follow up with more posts on other option strategies for a value investor if there is an interest.

Often times when I like a company and want to purchase some shares, the stock is trading a bit higher than where I would like to buy. I could do several things here

1) Just wait patiently till the price comes in my buy range.
2) Place a limit order to buy the shares at a lower price.
3) Buy some shares now and add more as the price moves down OR
4) Sell puts on the shares at a lower strike price.

Read the rest of the article here.

 


Disclosure: Short ESV put options