The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Options - You Make the Call


Subject:  Re: safe cash secured puts for income Date:  2/25/2021  9:29 AM
Author:  soccerboy Number:  11317 of 11330

To generate income I have been using credit spreads (usually Bull Put spreads but also Iron Condors or Bear Call spreads) on SPX. Typically about 1 month until expiration with $10.00 strike spreads and a minimum of $0.80 credit to open. Can often Buy to close the position after 3 weeks for $0.05 debit.

For example on 2/22, opened a position of Mar19 3625/3615 Bull put spread for $1.00 credit. Potential for a 1 month rate of return of approx 11%.

On 2/23, opened a Mar19 3545/3535 Bull put spread position for $1.00 credit.

Using an index like SPX reduces the potential negative impact of specific stock risk.

Any thoughts on this strategy for generating income?

Will take a closer look at the Bull Call debit spread mentioned above.
Copyright 1996-2021 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us