I noticed that Merck MRK has hit 100.74 today. However I feel that the price will come down within one month As I feel this is not sustainable.
So I take a sell call on Merck at a higher price say 106 for a month away. As I have taken the call when Merck was 100.74 I feel I have enough safety margin. Whenever the stockprice falls below this price Of 100.74 the premium will drop and I will then close my position.
This is the beauty of options. Ofcourse you have to be ready to see some red along the way, but as a seller I know that time is on my side!
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Comments