Put option strategy

Well it is a little too late to implement this of Ford (F), but here is a way to play down trodden stocks.

Selling puts on Ford. Now I know it sounds like risky business to sell options. In fact I do not recommend selling naked any options, in the case of Ford, (before today's earnings announcement) you could have deposited 700 dollars in your account and sold the 7 strike June put for .44 a six percent gain for 7 weeks. (assuming my math is correct)

The most at risk would be the 700 dollars. Stay with me here now, the stock can only go to zero and if so, you lose 700. Reality is that it will still trade and you can buy back the June and sell the next month until the stock is eventually above the strike and let it expire. I mentioned this strategy a few posts back for bottom fishing. The reason I mention this today is because Ford looks to be running up today on good news.

I do not like to do this on any position, but rather stocks under 10 dollars. Otherwise credit spreads on those over 10. Just one more idea to think about.