The future of GE and markets is an unknown and those shares you are buying COULD pay big time but who knows. Markets are all a gamble but the one thing to that is important is to buy and hold and don't look back remember you have to be in for the LONG haul.

Clear up the put sell is that where you have the right to buy or sell at a higher price?
Do you have to have a stake in the security to sell the put?

I see you have the obligation to buy at a lower price and keep the premium by selling the put. You would only lose your cost of the option if the stock price rises?
As long as your comfortable owning the stock at a lower price sounds good collecting $ on something your selling without owning it.

If I am the put seller....I have the obligation to buy your shares at price X regardless of the stock price. Yes,, I keep the premium regardless. So If I sold you a put contract that expires december 21st, 2018, with a strike price of 12.00.............you would pay me $72 today.

So if the price of GE shares was 12.00 or lower you could exercise your contract and I pay you 12$ a share. My EFFECTIVE price would be $11.28 per share because I have already collected .72 per share from you when you bought the contract.

If the stock price rises...I still keep the premium and the contract expires worthless on December 21, 2018. At that point I could sell another contract if I chose to.

You are essentially buying insurance from me.


No. I do NOT have a stake or a position in the security in order to sell the put. I MAY be trying to establish a position by selling the put. I would be willing to buy shares but only at a lower price than they are currently trading. On the other hand, I may just be looking for a way to make some income by selling puts that I believe will expire worthless at expiration....due to stock price being above the strike price of the contract.

Gotcha, have you looked at the option chain on GE?

Yes. The 72 that I used above, was current mid spread at that moment

I worked almost 15 years as a low level financial manager at GE, left in 1978. Even then the company had a fatal flaw. They were so obsessed with year-to-year and quarter-to-quarter earnings ratios that they repeatedly lowered product quality, cut R&D expenditures, and did just about anything because of their ingrained short-range-itis.

Nothing like a good long term strategy. This knee jerk 90 day reportingearnings and revenue and outlooks just don’t lend to a good long term well executed plan.

Business plans are one thing. Executing them is another. I supervised the compiling, reworking, and analyzing of annual and 5 year business plans at the profit center level every year. But whenever push came to shove the Schenectady and NYC gurus wore blinders. All they could see was short terms ratios. Their ever present question was "What immediate effect will it have on price of the stock options we get as incentive compensation?"

Incentive compensation together with managerial promotions for turning businesses around (read 'milking profits') was GE's downfall.