Everyone knows that buying options is unprofitable because their price is designed to melt by an average of that amount., by which the price of the underlying asset moves in your direction during this period, thereby nullifying your potential profit. This is provided if the price of the underlying asset moves in your direction.. It's good if the asset price catches up with the option's melting, а если нет, it is doubly insulting — you guessed the direction, and the money melted earlier. That's why, it would seem that, we must act the other way around — sell options and wait until expiration, always take your bonus. But it was not there either. Sometimes, rarely but aptly, the price on the long tails of the distribution will simply zero out all profits, which was collected at prizes by long and hard work. So that, at least buy options, even sell, long distance outcome one, you know which one.
But not everything is so gloomy — there is a method, which simultaneously combined the two inefficiencies of the American stock market:
1. Stocks are much more likely to rise than fall.
2. Options are more likely to profit when selling than when buying..
I.e, we buy shares and at the same time sell call options on them. The simplest strategy, which is even available to trade for the greenest newbies, and is considered the safest strategy in the American stock market. The meaning is — buy stocks and sell colas for them, we receive a cash bonus and, thereby, we create a safety cushion in case of falling stocks.
Yes, certainly, the share price can fall sharply and get a big loss, but with an average fall, the price does not go beyond the break-even limit before expiration. Anyway, a fall with an optional pillow will give a smaller loss than without it. Logically? Certainly. With a large number of transactions, we will have an advantage. Maybe. Так думаю. :)
Opened Covered Cola trades today (that's the name of the strategy, when we buy a share and sell options on it). Strike около цены. Expiration 20 november. I will keep until expiration. The horizontal line on the chart is the break-even level, that is, everything above it is profit. The vertical line is the level of the end of the position.. In other words, it remains to hold out for a few days and even if the price stands still, получим прибыль.
