Buy Put Vs Sell Put at Buying

Buy Put Vs Sell Put. If you are already long the shares selling a call against them is easier than selling the shares and subsequently selling a put. On the other hand, selling a put gives an immediate profit / inflow with potential for.

Buy 100 shares of yhoo @ 49. Short puts may be used as an alternative to placing buy limit orders. Ie an amount is paid up front which rises in value should the stock will move in the right particular direction (‘down’, compared to ‘up’ for the bear call spread).

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Or, you could sell two xyz 90 puts at $2.25 and collect $450 (2 x $2.25 x 100 = $450) on your willingness to buy 200 shares at $90. When you buy put option is you have to premium for buying so the risk is limited profit is unlimited but a case of selling of call option you get the premium where profit is limited and risk is unlimited. Further reading on options trading. Put buying is much better suited for the average investor than short selling because of the limited risk.