“Options Trading: How to Turn Every Friday into Payday Using Weekly Options” by T.R. Lawrence is a book I wanted to read to solve one of my trading problems.
The most challenging part of selling cash-secured puts is determining how low to set your strike price. The last thing you want is to end up upside down when you acquire shares after expiration.
1) This book recommends that you trade weekly options every Thursday.
2) Weekly options can give you higher premiums if you trade four of them versus one monthly.
3) To solve my cash-secured put problem, the book recommends you buy one long put that expires in 120 days.
4) You purchase one long put that acts as collateral or insurance as you trade weekly puts.
5) If the share price collapses, you can buy back your cash-secured put at a loss but then sell your long put at a profit.
I have yet to try this strategy; however, it seems legitimate. As a rather experienced options trader, I can say that it is interesting, at the very least.
This book will give you good ideas on how options trading can fit into your lifestyle. I will report back once I run a few of these trades. Good Luck!
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