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Investing Strategies / Options - You Make the Call


Subject:  Re: Options on AL Date:  3/30/2015  12:49 PM
Author:  davidbjonas Number:  11041 of 11357

Hck - Welcome to options and wishing you great success.

The particular strike & expiration date that you choose depends on your objectives and to what degree you are comfortable risking having your shares called away. Generally speaking, the higher you set the strike, the lower will be your yield & your risk of losing the shares. The farther out you set the expiration date, the higher will be your premium in absolute dollar terms, but it will be lower in yield terms.

Should you prefer to be more aggressive (that is, earn a higher yield while increasing your risk of assignment), you can select a lower strike price.
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