I have a couple thousand shares of Apple that I do not need to sell for a few years and I was wondering what your thoughts were on Using a third-party company affiliated with Ameritrade too I guess dabble in options in order to create some more value. But the biggest question is the risk. It appears that I can make around five or 6% by doing this so it appears that may be there is not a whole lot of risk. What are your thoughts
Puts selling is bullish strategy. The only risks will be facing implied volatility explosion, and possibly become a bag holder should the stock tanks. I think that selling AAPL puts makes much more sense because (1) IV at AAPL is still high and (2) AAPL seems to be at least has found a footing after the prolonged drop. AMZN is in a very different environment. My research shows me that AMZN is about to roll over, so selling puts here at $253 area can make you a bag holder perhaps for a very long time. I have been selling AAPL puts with pretty good success because it bounces up everything time I sold and close out a day or two later. AAPL is a stock I don't mind owning. AMZN on the other hand, is a very different stock in a very different environment in which not very favorable to puts selling.
I think what JC is saying is that the current environment, where implied volatility is lower than historical volatility, does not make for a good time to write puts. However, I think there's always ways to generate the type of income you're talking about with options with very little risk.
What makes people so very stupid so to sell outs now? Some robot iz gonna buy these puts az they dump their underlying stok and robo fvck a retailer dumb enough to sell puts in a secular bear market top.