Ryan & Beef

Monday – Friday | 11:30 – 11:45a CT

Using Options To Enter And Exit Stock

Ryan & Beef

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

On today's show, Ryan and Beef explain how we can sell options to enter into and exit out of long stock positions.

To get into a long stock position we can sell a put option. If the price of the stock is below the strike price of our short option at expiration, we can choose to take assignment of the shares of stock at expiration.

To then exit the trade, we can sell a call against our existing long stock position. If the price of the stock is above the strike of our short call option at expiration, we'll be assigned on our short call option, effectively selling the existing stock position.

The guys explain how this approach works and how to set up these trades so that we can get into a long stock position using a short put or put ratio spread and then exit the position using a short call option.


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