Selling Calls vs Buying Puts

Hello Traders,

I hope you are well and have had a great trading week so far! The market continues to be exceptional, with many trading opportunities available for taking advantage of the volatility and making money. I traded Tesla three times today with no luck, but I was able to reduce my losses by selling some calls on $AMD.

Shorting calls is a bearish to neutral bet that the stock, in this case, $AMD, will stay below the strike price. If you are right and the stock does nothing for a while or goes lower, your calls will expire worthless and you get to keep all the premiums.

A common question we are often asked is why a trader should be selling calls instead of just buying puts. The answer is speed. You only buy puts if you are certain about the speed of the move to the downside. If you are more neutral and think the stock will chop all day, selling calls has a higher probability of making money. In this situation, I would have made more money if I had bought some puts, but it does not always play out this way. You can watch our recap here.

If you are interested in learning about options, I strongly advise you to join our event in New York City. Ardi and Megan will both be making presentations on options and we have a few traders from a prop trading firm joining us as well to give us a presentation on 0-days-to-expiry options trading.

It has been quite some time since I have been this excited about an event. I sincerely believe we have put together a truly incredible program with some excellent speakers and presentations. We already have over 100 traders joining us and the maximum number we can host is 140.

Sign up for NYC Trading Summit! On the economy, inflation has been a double-edged sword. On one hand, it has been hurting most people, including the middle class, but on the other hand, it has been amazing for companies! As a percentage of the GDP, companies are now making more profits than ever before in history.

What do you think? Have you seen this greedflation in your business and the people you have been doing business with? Please reply to this newsletter, as I would like to hear from you!

To your success,

Andrew