Optionspuppy
2023-03-18

Earn 2% monthly from selling options $Manulife(MFC)$ 

Today I will share about selling strangle options on Manulife stock for a movie plotline. In this scenario, the stock ranges from $17 to $19, and the goal is to generate a around 2% profit per month from the premiums received for selling the options.

A strangle is a type of options trading strategy that involves selling both a call option and a put option on the having the same underlying stock with different strike prices, for my case is around $15 for the put option and $18 for the call option but the same expiration date. The idea behind a strangle is to profit from the potential price movement of the stock, while still limiting the risk exposure.

In the case of Manulife stock, assuming the stock is trading within a range of $17 to $19, an investor can sell a call option with a strike price of $18 and a put option with a strike price of $15 for around 4 months . By doing this, they will receive a premium for both options and be able to profit if the stock remains within the given range. The sell call I got 1.30 and the sell put I got 0.40

This 1.70 / 18.60 is around 9% for half 5 months adding the extra 2.5% from dividend makes up to 11.5% . This makes around 2% per month

The premium that an investor can receive for selling a strangle option will depend on several factors, including the current stock price, the strike prices chosen for the options, and the expiration date of the options. In this case, assuming that the stock is trading at $18, an investor could sell a call option with a strike price of $19 for a premium of $0.25 and a put option with a strike price of $17 for a premium of $0.30. This would result in a total premium of $0.55 for the strangle option.

To generate a 2% profit from the premiums received, the investor would need to sell the strangle option for $0.535, or a total of $53.50 (excluding transaction costs). If the stock remains within the range of $17 to $19 until the expiration date of the options, the investor will be able to keep the full premium received and earn a profit of $1.50, or approximately 2.8% of the selling price. Which works out to be around the 11.8% for half a year or 2% monthly

However, it's important to note that selling strangle options comes with risks. If the stock price moves outside the range of the strike prices, the investor may incur losses. You will incur losses of the strike price - current price- premium . If the stock price rises above the strike price of the call option or falls below the strike price of the put option, the investor may have to sell shares at the higher or lower price, respectively, resulting in potential losses.

In conclusion, selling strangle options on Manulife stock can be a profitable strategy for investors who believe that the stock will remain within a certain range. However, it's important to carefully consider the risks involved and ensure that the strategy aligns with the investor's financial goals and risk tolerance.

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Dear tiger readers Please help to share post also clicking the repost button and follow me as I published my post on my ideas and trading experiences and sometimes including my current dividend positions and winning sell call and put trades . 🦁🦁🦁🦁🦁Do follow me share my posts regularly So more people can learn about my trading methods and winning trades on selling covered calls and puts options I share my options trade below usually I sell at a higher price then buy back at a lower price for a profit

I also try to reward the first 100 commenters at least 1 coins each who also help me repost and like the article

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Dear @Daily_Discussion @MillionaireTiger @TigerStars @Daily_Discussion @Tiger_chat @0QH @MiniAce @Aqa hope you can feature me and more people can trade strangle options to earn 2% or more monthly .

As always do your on due diligence and tradings have risks 

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Comments

  • JessieTheresa
    2023-03-18
    JessieTheresa
    I think MFC can get lower
    • Optionspuppy:Β 
      Luckily was i am abit scary cat i switched my sell call of 19 to $18
    • Optionspuppy:Β 
      At least my cost is around 17.30 with the sell call
      And it it doesn’t fall below 15


      My cost is 16.90 based on the sell put
  • YorkTurner
    2023-03-20
    YorkTurner
    I've always said this is a buy under $24. How low can this go? $22 range?
    • Optionspuppy:Β 
      I am not sure . Hope not i sold call at $18 lowering my cost to 17.30 with a purchase price at 18.30


      I capped my max profits at 0.70 while continuing to take dividends while market see saw . I might be wrong tjanks for your insight
      Followed u and liked your post too
  • JuliusGoldsmith
    2023-03-18
    JuliusGoldsmith
    2% seems not much, but the accumulation over time will be significant
  • DaveLewis
    2023-03-18
    DaveLewis
    good. premiums sounds totally fascinating for me
  • shining87
    2023-03-20
    shining87
    Will get more shares via DRIP this week ! Don't get discouraged by the daily movement focus on the long-term !
  • XantheJuliana
    2023-03-20
    XantheJuliana
    When this goes back to real value. Some body is going to get rich.
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