Further Thoughts On Put Writing

By Lawrence G. McMillan

The sale of a naked put is often a very attractive strategy – especially if the put is “overpriced” (although “overpriced can be a very subjective term).  In this article, we’re going to look at some of the background on put writing, and then show a systematic way to select which puts are best to write.  We’ll start out with equity put options and then talk about selling index put options later on.

The methodologies described herein are ones that I have confidence in, for they have produced profitable results in actual recommendations and in trading accounts that we manage, over time.  However, there may other profitable approaches as well.  I am not maintaining that this is the only way to analyze put writes – only that this is one viable way.

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