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Options made simple: A beginner's guide to trading options for success by Jacqueline Clarke

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Chapter 13: Strategies for selling put options

Selling put options is a strategy you can use to profit when you expect the value of an underlying share to remain flat or increase slightly. Selling put options has the same relationship to the value of the underlying share as buying call options. The value of the underlying share increases, and so the profit on your option position increases. However, the risk profile is very different.

In this chapter we will look at the advantages and disadvantages of selling put options and also explore some of the strategies you can use when selling put options.

Selling put options

When selling a put option, you are granting the buyer the right to sell to you 100 shares of the underlying stock at the strike ...

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