RE: short position info you didn't know.... For those who follow BB. Realize that the Q10 will help boost this June report, and push the share price higher.
For that reason included my self. Went heavily into the 2013 May Naked Put 15 strike.
So if you are right. Then that will explain the reason for the increase in the short position.
Using a Put Selling Strategy – Six Tips to Selling Options
A few guidelines to keep in mind when selling naked put options:
- Only sell put options on stocks you want to own. Do not use this options trading strategy on high flyers just to receive the upfront income.
- Only sell enough contracts to stay within your comfort zone. If you normally trade in 500-share blocks, then only sell five option contracts.
- If you’re uncomfortable at any time during the trade, or do not wish to own the stock at the strike price you’ve chosen, then you can unwind the trade at any point. All you have to do is buy back the put options you’ve sold.
- The option price will fluctuate during the course of the trade. It may get cheaper or more expensive while you hold it. The bottom line is – you’ll either get to buy the stock at expiration or the option will expire with no value.
- You will need to have an approved “option trading account” with your broker. This needs to be set up before making these transactions.
- You’ll always know ahead of time what your potential total outlay will be if obligated to buy the shares. No surprise endings.
That’s all there is to selling put options. It’s easy, simple and much safer than most investors imagine if you just stick to my six tips above.
Lee Lowell
Selling Naked Put Options: Get Paid to Buy Stocks at a Discount.