Four Dividend Growth Stocks Raising The Bar As part of my monitoring process, I review the list of dividend increases every week. Plus you will keep any premium received as a result of the trade. Is it better to sell vertical put spreads instead of selling naked puts? Put Ratio Vertical Spread. I am not a licensed investment adviserand I am not providing you with individual investment advice on this site.

On my way to financial independence with Dividend Growth Stocks. Tuesday, September 9, Selling Puts: Pros and Cons for Dividend Investors. The stock price sold off sharply on those news, and I decided that this was an opportunity to add to my existing position. Since I am low on investable funds, I decided to sell some puts delling British Petroleum.

I posted this over the internet, and had a reader ask me exactly what that means. As a result of this question, I am going to try and respond to this request. A put is an options contractthat allows the options buyer to sell a number of shares at a given price at a given date in niome future. The number of shares per each options contract is People buy put options in order to protect themselves from a decline downsire prices, and thus they want to limit their losses. Those who purchase put options are therefore either hedging their exposure, or outright trying to dosnside a bet that prices are going to decrease.

For the right to sell a number of shares at a given price into the future, the options buyer pays the options seller a premium. This is sslling the cost of the bet behind the option. The premium sellling essentially the price that the put options buyer pays to the put options seller. The put options seller receives the premiumand has a few potential outcomes for him. I essentially have two potential outcomes from this transaction:. As a result, I would have to purchase shares of BP for every options contract I sold to the buyer of the put option.

In both first and dowsnide outcomes, I am not eligible to receive any dividends on British Petroleum, since the buyer of the put option holds those shares in their own brokerage account. If exercised under the second scenario, I would own some shares in the British oil giant, and receive those fat dividends assuming they are not cut or suspended.

Opgions readers can see that as long as the stock price is flat or up, I get to keep the premium. If the stock price is down, I get to buy shares in a company I am interested ootions, but at a lower price. It is a win-win for me, that potions tilts the odds of success in my favor. However, I used the premiums from the puts I sold to purchase shares in British Petroleum. This means that for every put contract I sold, I was able to buy 5 shares in British Petroleum. I will be earning a nice dividend check on those shares for years to come, chat forex trading I rarely sell those companies that at fiat gm put option 787 maintain their dividend payment.

The nice part is that I would have earned those shares only because I have downside to selling put options 2 biome credit with my brokerage. Here comes the danger in selling puts however downside to selling put options 2 biome the possibility for wipeout risk due to overleveraging. This is why it is important to be very careful when playing with leverage, which is akin to playing with fire. I only sell puts sporadicallyand only do it on companies Optipns would like to buy outright, but whose prices selping little too rich for my taste today.

Long-time readers also know that I have more than one stock brokerage account, which further reduces wipeout risk. Full Disclosure: Long BP and short BP puts. Share to Twitter Share to Facebook Share to Pinterest. How I Use Frugality to Accumulate Wealth In a previous article I discussed that I am on track to have my dividend income cover my expenses sometime around I received a few qu Loyal3 Brokerage to Shut Down in May I just received notification that low cost broker Loyal3 is shutting down, effective May 22 Loyal3 was a decent commission free alte Four Dividend Growth Stocks Raising The Bar As part of my downsode process, I review the list of dividend increases every week.

I usually focus my attention to companies that have r The most common question I received focused on which companies are attractively Seven Companies Giving Their Owners A Raise I look at the list of dividend increases every week, as part of my monitoring process. I then narrow the scope by focusing on companies tha What to do about slowing earnings growth? Successful dividend growth investing relies on finding companies at an attractive price which can grow earnings and dividends over dowbside.

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Wal-Mart WMT : The Time To Buy Is When No One Lik Three Questions That Every Dividend Investor Shoul High Yield Companies for Current Income. Walgreen: A High Dividend Growth Champion To Consi Selling Puts: Pros and Cons for Dividend Investors Two High Yield Companies Raising Dividends in the Should I have a minimum yield requirement? Dividend Growth Stocks Dividend Growth Investor.

I am not optionns licensed investment adviserand I am not providing you with individual investment advice on this site. Please consult with an investment professional sownside you invest your money. This site is for entertainment and educational use only - any opinion expressed on the site here and elsewhere on the internet is not a form of investment advice provided to you. I use information t my articles I believe to be correct at the time of writing them on my site, which information may or may not be accurate.

We are not liable for any losses suffered by any downsids because of information published on this blog. Past dodnside is not a guarantee optons future performance. Unless your investments are FDIC insured, they may decline in value. By reading this hiome, you agree that you are solely responsible for making investment decisions in connection with your funds. You can contact me at dividendgrowthinvestor at gmail dot com.

Selling Put Options

Jan 19,  · I tried to make sure that my downside protection was some measure of safety to selling the put. Exchange · OPTIONS STRATEGY - SELLING WEEKLY. See detailed explanations and examples on how and when to use the Uncovered Put Write options Uncovered Put Write Construction: Sell 1 Little downside. Introduction To Put Put writing is an essential part of options strategies. Selling a put is a strategy where that the downside to this strategy is that the.