The golden window of sell put is coming

OptionProMax
2022-04-02

I wrote an article about sell put before, the controversy was very big, and the market turned to a unilateral decline not long after writing, this strategy is basically impossible to do.

This article is only a personal review and reflection record, and does not constitute any investment advice

How feasible is it to sell an option? This is about how to do a sell put

sell put life-saving strategy


sell put how to earn royalties without overturning


If you haven't done sell put, you can read the first article first. Moreover, it is highly not recommended for novices to do sell put directly. Sell put is a typical big and small, and it may be lost. For example, before When the financial report was made to sell put fb, many people liquidated their positions overnight.


Sell ​​put has a lot of requirements for the selection of the target. Don't do this operation casually. For example, Tencent was about 400 Hong Kong dollars a month ago, and many people sold 350 put, which expired at the end of March. As a result, 3 During the month, Tencent once fell to 298 Hong Kong dollars. If the account margin is not enough, the account will basically be liquidated. This is just one case, in the past three months of this year, such things have been common.


Therefore, you must think clearly before the operation, whether you are taking the order, or to earn the premium. If it is to take the order, do you have enough funds? Many people will pull the leverage to a high level and the funds are not enough to take the order, which typically goes against the original intention. If it is to earn royalties, the strategy for dealing with special situations must be well done. Death is the most deadly. Investment must be able to afford to lose. If you cannot afford to lose, you will only lose more. The most difficult part of sell put is not necessarily the selection of the target, the exercise price, etc., but the execution power. If the exercise price selected by sell put is close, the stock price fluctuates greatly, which will cause the account to fluctuate greatly. In this case, the inner fluctuation must be There will be, especially for newbies.


Today, we analyze several stocks that are suitable for sell put, and in this wave of rebound, these stocks are doing well. For example, Tesla, Nvidia, Apple, Microsoft, and many other targets, this article will mention these four.

The above is the daily chart of these four stocks. Among them, Microsoft has the weakest rebound and can not do it. The other three, Apple is the strongest, and it was close to a record high. Tesla and Nvidia have rebounded sharply, but they are still about 15% away from their all-time highs. Relatively strong, but due to the large fluctuations of these two, the profit of sell put will be higher. For these three stocks except Tesla, if the support line is not broken and continues to oscillate, then continue to do sell put. Because of the current market uncertainty


Regarding these four trends, I have also written before that the short-term rebound is in place, and Apple is even close to a record high. The continuous return of the dollar has formed a very strong support for large technology stocks. After the strong rebound is over, as long as it is not large The decline is good for the seller. Apple's support is around 165, Nvidia is around 250, Microsoft is around 300, and Tesla is strong sideways. The first quarter sales should be announced next Monday, and it will not exceed expectations at present, depending on market interpretation.


For large technology stocks, I personally don't think they will go directly to the A word, and they will not fall back all the previous gains in the short term, but the stock market this year has been very volatile, and black swan events have occurred frequently, so it is really not easy to judge. At present, it seems to be a good sell put window period. If you do, you must prepare a response plan.


TSMC will report earnings before the market on April 14th, and other large technology stocks will also report earnings at the end of the month, so those who want to do a sell put should try to do it before the earnings report. Those companies that have a week left to report their earnings, don't make a sell put , it may lose a lot of money, and it is not worth doing this kind of operation.


Sell ​​put is not a very clever strategy, but for people with a lot of capital, you can make some money through this strategy. I have been thinking about how to make some improvements to the strategy, but in general, this strategy is not perfect Yes, only what suits you.


Many people are concerned about whether or not to do a sell put of China Concept Stocks. My opinion is not to touch it. The entire market has fluctuated greatly recently, and it is basically driven by news. If you are swayed by the news, it is better to have a look.


For stocks with a unilateral downward trend, it is really dangerous to use the sell put strategy. A gap and accelerated decline will make you directly liquidate your position. For example, if you like to do the Hang Seng Technology Index and want to use high leverage, if you want to go long, you can directly do something like $XL2CSOPHSTECH(07226)$ , this ETF has risen from the previous minimum of 1.1 When it reached 1.7, it increased by more than 50%. Compared to sell put. It is actually better to use this kind of bottom-hunting. A unilaterally falling stock + sell put bottom-hunting will be fatal. However, judging from this trend chart, the best game rebound time has passed. If the second dip in the later stage can form support, you can consider using this target for bottom-hunting. And many people who don't play options use this target operation, so the liquidity is still ok. Let's wait and see if there is a chance. Zhongjing should not just sell put even Tencent. If you are a master then feel free.

$NVIDIA Corp(NVDA)$ $Tesla Motors(TSLA)$ 

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Comments

  • ValuInvestor
    2022-04-03
    ValuInvestor
    Do trade cautiously as markets are extremely volatile and unpredictable. Markets turn on a dime and a profit turns into loss very quickly if not careful
  • cozyzi
    2022-04-02
    cozyzi
    I think China technology stocks have investment value and are at a low level where I think they can be bought.
  • bouncyo
    2022-04-02
    bouncyo
    I will continue to be bullish on Chinese technology stocks after a rally yesterday on the positive news of SEC-China talks.
  • hydros
    2022-04-06
    hydros
    don't sell put just before earnings, any earnings disappointment will cause the price to gap down.
  • Blessed Moo
    2022-04-05
    Blessed Moo
    Good information. Thanks for sharing
  • YesMdm
    2022-04-05
    YesMdm
    sell put is..? to short or long the market?
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