Wednesday, April 1st, 2015

Get Paid for Buying Stocks

Get paid for the purchase of shares by Larry Lane InvestorZoo. com selling cash secured puts are considered derivative investments. Sell put option makes sense if an investor wants to buy shares of a particular stock or ETF at a discount rate at today’s prices. Sale puts his best work in a neutral to a wide market strongly bound market. Definition The sale of a cash-secured put is one of the more conservative option strategies available. By selling a put option will be required to purchase underlying shares if assigned, at any time, regardless of how low the stock is trading. The net price paid for the shares underlying the allocation is equal to the exercise price of the put-premium received for selling the put. For this reason, the chosen strike price less the premium received should reflect the price target of investors to purchase underlying shares. Regardless of the direction of stock prices after the capture point of sale, the seller keeps the premium put. You receive the bonus money generated within 3 market days in their own, often your account is credited immediately. While the money in your escrow account can be invested in short term or long term, interest-bearing instruments such as CDs, a money market or bond fund. Many individual investors find places selling as buying a stock for sale. ” An investor who writes a contract for making deposits while total cash amount of a possible underlying stock in your brokerage account. The purpose of depositing money is to ensure that money is available should be allocated. This is also considered to be “short” a stock. The investor who has the short position is forced to buy shares at a strike price of the put. Example If you sell a 40 put for $ 1, you must have $ 4,000 in cash in his account. From an option equals 100 shares, this will buy 100 shares at $ 40 if assigned. The maximum benefit is the credit he had in his mind in this case $ 100. You will earn $ 1. 00, but will be assigned and have to buy the stock if the stock falls below $ 39 per share. Most traders however the position is closed before maturity if you can buy back the option at a price much lower than they sell. For example, the sale of the put for $ 1. 00, and the repurchase of $. 15. When you buy or sell an option, a call or put is equal to 100 shares. If the population drops significantly below the price due on the sale, the investor may be forced to buy shares at the exercise price, so it has incurred a loss. However, any investor whose motivation in writing a cash-secured put is to buy the underlying stock. In fact, he paid a premium for assuming the risk of being forced to buy it. Therefore, the investor must be committed in advance to a price for possible purchase. An investor should also consider the risk is the loss of opportunity. After selling the put, the underlying stock price can rise and remain above the put strike price. The seller said, however, only keeps the premium received as sales. Sell offers guaranteed cash option is ideal in a volatile market and decay time will decrease the price of an option, allowing the trader to repurchase at a lower price and recognize a gain. Options involve risk and are not suitable for all investors. For more information, please read the characteristics and risks of standardized options. Copies of The Options Clearing Corporation, One North Wacker Drive, Suite 500, Chicago, IL 60606, or call or visit 888options 1-888-OPTIONS. com. This material is being provided to you for educational purposes. This information is not, nor be construed as an offer or a solicitation of an offer to buy or sell securities by InvestorZoo. com / Media Works LLC Seattle. InvestorZoo. com / Seattle Media Works LLC does not offer or provide any investment advice or opinion regarding the nature, potential, value, suitability or profitability of any investment or particular investment strategy, and be fully responsible for the investment decisions you make , and such decisions will be based solely on their evaluation of their financial situation, investment objectives, risk tolerance and liquidity needs.

About Author Larry Lane is the head blogger for biz dev InvestorZoo a social network dedicated to personal finance. Larry Lane is the editor of InvestorZoo. com, a social network specializing in personal finance. Send questions and comments to Larry. Lane @ InvestorZoo. com


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