Virtual Put Selling Portfolio

Market Shadows has created what we hope will be a very valuable new feature. It’s our Virtual Put Selling Portfolio.

Here’s a snapshot of our Virtual Put Selling Portfolio as of 2/24/13. We’re in the process of making it self-updating, but this one is not yet. Check back. 

Screen Shot 2013-02-24 at 12.26.54 PM

Notes:

We have not added LIFE yet. That will be Monday, with a limit SELL price of $4.00. (Article here.)  

Selling (also called ‘writing’) a put means getting paid a specified price per share up front for agreeing to buy 100 shares of a designated stock through some future date (the option’s expiration date) if asked to by the option’s owner. 

The put’s strike price sets the price you must pay if the option gets exercised. If the underlying stock closes above the strike price on expiration day, our obligation to buy will be extinguished (unless the put was assigned earlier, which happens occasionally). 

Why would anybody want to sell a put?

  • Sale of put premium generates immediate income
  • ‘If Put’ prices are lower than the market prices at trade inception (discount on shares)
  • Put writers have a built-in ‘margin of safety’ that outright purchase cannot provide

 

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Trackbacks

  1. [...] added a new short PUT position to our Virtual Put Selling Portfolio a few minutes ago. Schlumberger (SLB) was trading at $87.08 at the time of trade [...]

  2. [...] Market Shadows has exposure to LIFE’s upside via a short put in our Virtual Put Selling Portfolio. [...]

  3. [...] are going to sell one APD Jan. 2014 $90 put in our Virtual Put Selling Portfolio with a limit price of $10.60 when the market opens on Wednesday, February [...]

  4. [...] will also be SELLING one LTM Aug. 13, $45 Put in the Virtual Put Selling Portfolio on February 20, 2013 [...]

  5. [...] Market Forces – Lee’s Still Bullish: Cis Bam! Fed Drives Massive Liquidity Surge, Treasury Says Thank You Ma’am   Value Exploration: Our Virtual Value Portfolio (stocks) is almost filled up, so we sold some PUTS in our Virtual Put Selling Portfolio. [...]

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