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Welcome to your source for answers to questions about option concepts, strategies, and terminology. A new question and answer is published each week. To view the Ask the Institute archives, click the "Ask the Institute Archive" link below.

Please note, questions WILL NOT be personally answered and may not be chosen for publication on the web site.

View the archive of all "Ask the Institute" questions.

 

This week's question:

DATE: August 15, 2014

QUESTION:

What are some guidelines an investor should consider when selling put options?

ANSWER:
When selling put options, it may be helpful for an investor to consider 1. Selling puts on a stock that they are willing to buy; 2. Pick a price that they are willing to pay; 3. And, finally, contemplate selling a cash-secured put that achieves your target purchase price if the put is assigned. To learn more about selling put options, view this segment of "Ask the Institute."

CBOE Volatility Index (VIX)