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A stock option is simply a contract between two people. One type of option is called a "put option." The person who buys a put has the right – but not the obligation – to sell a stock at a given price, in a given time period. The person who sells a put has the obligation to buy a stock at a given price, in a given time period.
Selling put options is one of the greatest money-making strategies ever created, by selling puts, you can collect regular cash payments by offering to buy stocks at a discount.
Earning extra cash on stocks you own; after you buy a stock, you can enter the options market and sell someone the right to buy your stock at a higher price in the future. In return for agreeing to sell your stock, you collect cash up front.
Covered Call; a Covered Call is an option on stocks you currently own. Selling options on stocks you own can increase your income cash flow on a monthly basis.
70 % of the time selling options will expire worthless meaning the selling of those options can make you money.
You can add to your dividend income by selling options on those shares that pay a dividend that you own.
Dan
