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Important. This post is NOT investment advice. Investments in Etrade options are NOT FDIC-insured and may lose value all the way to $0. Buying puts/shorting a stock has severe or unlimited risks.
Day trading option has very big leverage and serious potential to profit (or to lose money).
One of my favorite strategies is to buy puts where there is a gap that shows a price decrease. Why?
All image credits in this post are to Etrade.com.
If you have a loss or a gain on your trading, you will receive a tax form by January 31. The gain or the loss needs to be reported to the IRS.
Contact me to process your gain or loss with the maximum tax-advantage.
We are using a different way to earn: we are selling calls vs buying puts. We are NOT betting on a direction. We are betting on the stock staying relatively the same. What does it do?
Note: Don’t forget to paper-trade before you start real trading!
The stock needs to go up about $3 for you to start losing money. It is possible, of course. Never put in money you can not afford to lose.
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