Why Not Sell?
Tim Knight | Oct 23, 2020 12:07PM ET
I have mentioned many times my in XME ETF (NYSE:XME). I have mentioned just as many times how slowly the thing moves. Thus, I bought March puts, to give me tons of time, although I think the ultimate move could be two or three years away.
I then had an “aha!” moment (more like a “duh!” moment). Why not just sell out-of-the-money calls? I mean, if this thing is going to just slowly burn lower for years, wouldn’t that make more sense? Could that be a little cash-maker on its own, provided that XME doesn’t shock to the upside?
I’d love to hear opinions on this. We could all definitely learn something from some of the more experienced traders out there with option-selling experience.
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