3 Options Trades You'll Get Paid to Make
Bryan Perry, August 12, 2009
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Before you make a single high-yield investment, you must read this.
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Sell MRK Sept 32 Puts (MZRUD)
I recommend selling the out-of-the-money MRK Sept 32 Puts (MZRUD) at $2.60 per contract. Selling one naked put means you are willing to take possession of 100 shares of Merck (MRK) if the stock closes below $32 by expiration day.
Because Merck is an institutionally traded name, I believe fund mangers will walk the stock up to $34-$35, whereby anyone who sells the naked put will keep that $2.60 premium for no out-of-pocket cost other than having enough buying power in the account to purchase that 100 shares of MRK if, in fact, the stock does close below $32 and the market "puts" the stock into the trader's account. If the stock closes above $32 on expiration day, then that $2.60 is 100% profit. Nice!
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