NovaForge INVESTING

Selling put options is a powerful income-generating strategy that lets you collect premiums upfront while positioning yourself to buy quality stocks at a discount—if the price drops to your chosen level.

Hedging Your Portfolio with Puts and Calls

In options trading, the strike price is the fixed price at which you can buy (call) or sell (put) the underlying asset. When the stock price equals the strike price, the option is at-the-money (ATM) . This is a key moment because ATM options have zero intrinsic value —no built-in profit from exercising. Understanding moneyness helps explain this: In-the-money (ITM) : Has intrinsic value (call: stock > strike; put: stock < strike). At-the-money (ATM) : Stock price = strike p

An options contract is a versatile financial derivative that gives the buyer the right, but not the obligation, to buy or sell an underlying asset—such as a stock, index, ETF, or currency—at a predetermined price (the strike price) within a specific time frame (until the expiration date).