MTM Options Trader Newsletter - Selling Naked Puts and Calls – All You Need to Know

This Week in the Market The major indexes closed out this past earnings-filled week mostly lower but not enough to sound any bearish alarms. The Dow, Nasdaq and S&P 500 are all currently comfortably above their 50-day moving averages. Implied volatility levels remain on the low side as the option market is not pricing in any bearish concerns as least at this point. The delta variant continues to accelerate, sparking further concerns of another wave of infections and mask mandates, which would not be good from a human or economic standpoint. For now, a bullish to non-bearish bias still looks smart as far as the overall market in concerned. It is a pretty hectic week as far as expected economic reports go, ending with the latest job numbers before the market opens on Friday. The Federal Reserve maintains that they will keep a watch on inflation and take appropriate measures if needed. Quarterly earnings keep rolling in but at a lighter pace with many big names having already reported. Have a healthy, prosperous and stimulating week, and enjoy the start of August!

Aug 2: Construction Spending Aug 3: Factory Orders Aug 5: Jobless Claims Aug 5: Trade Deficit Aug 6: Unemployment Aug 6: Wholesale Inventories Aug 6: Consumer Credit Read Our Blog

Selling Puts and Naked Calls – All You Need to Know There are only four things to do as an option trader that do not involve a spread. Most option traders know that they can buy a call option as a bullish strategy and buy a put option as a bearish strategy. But many option traders have never looked at selling naked calls and puts. Of course, like everything in option trading, there are major pros and cons to selling naked options. Let's take a closer look. A long call position gives the owner the right to buy shares of stock at the strike price up until expiration. Maximum profit is unlimited, and Continue Reading ... MTM Watchlist Here are a few trade ideas we may focus on in group coaching class this week: AMZN – After getting lit up following earnings on Friday, a potential bounce back may be in the cards. Potential bull call spreads will be examined. TSLA – The stock continues to flirt with moving higher but the $700 level keeps putting the clamps on that move. A break above that level will possibly trigger some bull call spreads. UAL – We modeled out a couple of bearish trades last week on the stock, and it looks like with Friday's weak close there may be more of an opportunity to move even lower. Additional long puts will be considered.

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The strategies in this newsletter are for educational and informative purposes only. All information disclosed in this newsletter should not be considered complete in its entirety. Market Taker Mentoring, Inc. will not be held responsible for changes, oversights, errors or omissions. Dates, prices, news and other information may not be accurate. Please verify all information before trading. You alone are responsible for your own investment decisions. Options involve risk and are not suitable for all investors. Before trading options, please read Characteristics and Risks of Standardized Option (ODD), which can be obtained from your broker; by calling (888) OPTIONS; or from The Options Clearing Corp., 125 S. Franklin St., Suite 1200, Chicago, IL 60606. No statement in this newsletter is intended to be a recommendation or solicitation to buy or sell any security or to provide investment or trading advice. Traders and investors considering options should consult a professional tax advisor as to how taxes may affect the outcome of contemplated options transactions. Copyright Market Taker Mentoring, Inc. 2008 - 2021. All rights reserved. Reproducing or redistributing this content is a violation of federal law.

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