The options market can accomplish a few things. If you don't agree with any part of this Agreement, please leave the website now. It is also possible to gain leverage over a greater number of shares than you could afford to buy outright because calls are always less expensive than the stock itself. Can be tailored for exact dates, amounts, and day count conventions. Purchased with the same exercise price and expiration.

In my last article, Sirius XM and the Options Play: Writing Covered CallsI covered the Call side of the options market as it relates to Sirius XM Satellite Radio NASDAQ: SIRI. This article will focus on the Put side of the options market As with my last article, a cautionary statement needs to be made. The options market is not for everyone. There are do forex brokers cheat traders kpes risks and costs in playing options, and investors should seek out the advice of a professional prior to becoming involved.

That being said, we can look at some strategies that are used a lot with investors optoin do deal in options. Options are also time sensitive. This means that the factor of when the option expires can add to metatrader rss search detract from the price In the previous article I noted that Sirius XM has several xmm of investors. There are traders, passionate cultish investors, those that are long, short, and those that play the options side of the market to make money in this equity Many investors follow Sirius XM closely and feel that the long term potential of this company is quite positive.

Their challenges include figuring out a way to add to their position, determining a selling or entry points, whether or not to trade in and out, and figuring out what this stock will do in the short, intermediate, and long term. In many ways some not all Sirius XM investors are so connected that they need some sort of action option long short put call xm be happening.

The "Buy-and-Hold" investors can oft sit on their position, and wait, but that takes kption certain amount of discipline, shorf the wait can be frustrating. The options market can accomplish a few things. Out can allow you to stay active in the market, can protect your position, and can also make or lose you a lot of money. We will use this same example in showing you how "Put Options" and "Marrried Puts" work A Put is when an investor expects the underlying equity in this case SIRI will decline in price.

The buyer of a Put can profit if the stock does go down by either selling the put option to someone else, or by exercising the option and buying the shares. One potential strategy he could use is puts in the option market remember, this investor feels good about the long term prospects of the company and wants to hold his shares The investor could buy Puts to act as downside insurance against his 20, shares that he is long on.

This type of strategy is typically used longer term. You can sell put contracts to other investors. This gives the other investor the right to buy the underlying option long short put call xm at a set price within a specified amount of time if the equity falls below that set price. Our investor with 20, shares, who wants to hold them, could take the risk of selling put contracts. Getting some money is better than none. The bottom line is that the options market plays a roll with the equity market, and there are people who actively participate in options.

The price swings can be substantial, and the risks and rewards distinctly different than with the equity. When Sirius XM oprion into ranges, options get quite popular Readers should catch the first article in this series to get a broader understanding and scope of the Options market and Sirius XM. In this piece we will cover the "Put Option" and "Married Put" option. Disagree with this article? Follow Spencer Osborne and get email alerts.

Short Put Option Strategy

Ameritrade. Options Strategies Made Easy. No Hidden Fees or Trade Mins! Online Trading Platform, Trading Software | thinkorswim. Managing Risk with Options Strategies: Long and Short Call and Put Positions. Learn the various payoffs long or short positions on call and put options Risk. Trade Options on DAX, CAC, S&P etc. Tight Spreads! Risk Involved.