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6.0  SELLING PUT OPTIONS
Diversification (covered in section 3.0) can be as simple as having about 50% of one's assets in
CASH and the rest in the Leveraged NASDAQ Index ETF (symbol: TQQQ).   
Options can be used to generate income (CASH) and as a means to acquire the Index ETF (TQQQ).

There are misconceptions about options because of it's complexity and the use as speculation to
achieve high rates of return.  The probability for a profit is very LOW when buying options (Put or
Call).  However the probability for a profit is relatively HIGH when selling options.

There are many strategies in the use of options other than for speculation and the use of options
to generate income is by Selling Options. 

One can sell Put Options when one does NOT already owe the stock..  
     on margin accounts, one can sell Put Option with borrowed funds from the broker to
     secure the trade. 
     on IRA accounts, one can only sell Cash Secured Put Options, where there must be sufficient 
     CASH in the account to purchase the stock should the underlying stock be assigned.  
An article about Cash Secured Put Options is at:
http://www.optionseducation.org/strategies_advanced_concepts/strategies/cash_secured_put.html 

One can search the Internet with words like "Selling Put Options" for articles to understand and
learn more about selling options.  Below are links to an article and a video  on selling options.
(1)  article entitled: "Sell Put for Income like Warren Buffett"
(2)  Video on Covered Call Option which has the same risk & profit profile as Selling a Put Option
​(3)  Video on Passive Income - Selling Put Options
(4)  Video on Selling Put Options for Weekly or Monthly Income

The reason to learn this option strategy of Selling Puts are: 
(1) provides a means to acquire a stock below the current market price, 
(2) has a much higher probability to be profitable than buying an option (Put or Call) and 
(3) results in collecting and keeping an option premium (CASH) as long as the stock price is 
      above the Put strike price at option expiration.

Selling Put Options is widely misunderstood, especially among stock brokers and fund managers
that do not understand options. Selling Options can be appropriate for conservative investors.

According to the Chicago Board of Options Exchange, selling options is one of the few strategies
that outperforms a buy and hold strategy over time.

Click on Table 6.1 for a list of considerations on when to Buy or Sell a stock or option along
with the advantages and features of each.