Sell Deep 50-100% OTM options for winners

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2. Sell Deep out of the Money. Select markets where premium is available 50-100% out of the money. Rarely possible in stocks. Quite feasible in commodities. This forces the market to make an extreme move against your position to put the option in the money. It also allows you to manage your risk based on the option value – not on the price of the underlying or it’s proximity to your strike.

Caption: Selling Deep out of the money means seeking strike prices 50% away from the current price of the commodity. In late 2011, silver bulls could still sell 16.00 put options for high premiums - nearly 50% below the current price of silver.

James Cordier & Michael Gross
Contributing Writers, Liberty Trading Group/Optionsellers.com
Optionetics.com ~ Your Options Education Site

USCoralSea

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