| GUEST POST: JACK CARTER
Handling the Worst-Case Scenario: Turning Challenges into Opportunities
One of the most common fears I hear from folks new to options selling is, "What happens if the stock gets 'put' to me?"
While it's a valid concern, I think too many people put the cart before the horse…
And end up stopping themselves from enjoying what, for me, is (almost) the only way I trade.
But let me tell you, after decades in this game, even the so-called "worst-case scenario" can be turned into an opportunity.
Here's how:
1. Don't Panic:
First and foremost, take a deep breath. Remember, if a stock is put to you, it means you're buying it at a price you initially deemed fair. You've essentially gotten a discount on a stock you decided was worth owning in the first place. (this is one of the top rules I give for anyone selling options. ONLY sell options on rock solid stocks.)
2. Re-Evaluate the Stock:
Now that you own it, take a fresh look at the stock. Has the company's fundamentals changed, or is the price drop more due to market sentiment? If the company is still solid, you might be holding a gem that's temporarily undervalued. (that’s GREAT news!)
3. Consider Selling Covered Calls:
Now that you own the stock, you can generate additional income by selling covered calls against it. This strategy can help offset the cost of the stock and potentially increase your profit while you wait for it to be called away from you.
4. Diversify and Balance:
If the stock that's been put to you is a significant portion of your portfolio, consider rebalancing. Diversification is key to managing risk.
5. Set an Exit Strategy:
Decide upfront what your strategy will be for this stock. Will you hold long-term, aiming for appreciation and dividends? Or are you looking for a short-term bounce back? Set clear goals and stick to them.
6. Turn the Situation into an Opportunity:
Remember, every market downturn presents a buying opportunity. If a stock is put to you during a market slump, you might be in an excellent position to benefit from the eventual upswing. (continue selling covered calls and collecting dividends in the meantime!)
After decades as an options seller, I can tell you that having a stock put to you isn't the end of the world.
In fact, with the right strategy and mindset, it can be the beginning of a new opportunity.
Over the years, I've had several stocks put to me, and by rolling with the punches, I’ve managed to turn it into even more opportunity.
If you’ve got a large trading account — I’m talking $50,000 or more…
And you’re ready to discover the top strategy I use to grow my big accounts, I urge you to join me right now…
I’m going live at 1pm Eastern with my Big Account Masterclass where I’ll reveal the ins and outs of selling options to grow my large accounts.
Just click here to join me LIVE right now!
Trade safe,
— Jack Carter | | | | |
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