An instrument for selling puts

Discussion in 'Options' started by BenChi, Mar 13, 2007.

  1. BenChi


    I am interested in selling puts on an index etf for long term investment purposes. I hope to collect the premium, but would be happy to be assigned the shares since i will hold them until i am old.

    The other element of this plan is that I will not act all at once - I will sell the puts so that each contract, should i be assigned, would work out to 1/3rd of my total cash balance.

    Ideally I would use options on the SPY etf to do this - but since i am starting out with a cash balance that is small - delivery on 1 spy contract will work out to more than 100% of my cash - instead of the 33% that I am aiming for.

    Can anyone suggest a good ETF for achieving these goals? Something like SPY but with a lower trading price...

    Rydex S&P Equal Weight Almost works - but the options are too illiquid...

    thanks for your help!

  2. MTE


    Get more money or try some of the lower priced ETFs such as QQQQ (Nasdaq 100) or IWM (Russell 2000). The liquidity doesn't get better than this and their options trade in penny increments.
  3. asap


    here is a list of the most liquid etf traded in the US. options liquidity is not always good especially bellow the top10.

    most trade above $50 with few exceptions such as EWJ, the Japan etf.

    good luck