Important — please read. Premium Operator is an educational publication describing one approach to organizing an options-selling practice. It is general information for a broad audience. It is not individualized investment, tax, or legal advice, and it is not a recommendation or solicitation to buy or sell any security or to adopt any strategy. It does not consider any reader's financial situation, objectives, risk tolerance, or account types. The author is not registered as an investment adviser or broker-dealer, and Premium Operator is not affiliated with any brokerage, exchange, the Options Clearing Corporation, or any insurance company.
Options risk. Options involve substantial risk and are not suitable for all investors. Read Characteristics and Risks of Standardized Options (available from the Options Clearing Corporation at theocc.com) before trading options. Selling options can produce losses far larger than the premium received. A cash-secured put can require you to buy shares at the strike price even if the market price has fallen far below it, and you can lose most or all of the cash set aside. Options can be assigned early, prices can gap, and markets can become illiquid. Using margin magnifies losses and is outside the approach described here. You alone are responsible for your trading decisions and their results.
Tax. Tax rules, including wash-sale rules and the treatment of trades across taxable and retirement accounts, are complex and change. Nothing here determines your tax treatment. Consult a qualified tax professional.
Fictional data; no results. All data in the workbook and examples is fictional and for illustration only. It is not a backtest and not a record of the author's or anyone's trading. Any ticker symbols are illustrative only. No performance, returns, or results are stated or implied. Results vary, and you can lose money.
Calculations. The workbook is provided "as is," without warranty of any kind. Formulas may contain errors or may not fit your situation. Verify every calculation independently before placing any order.
Author's trading. The author trades options personally and may hold positions in securities or funds discussed in general terms.
Use of this publication is subject to the Terms of Sale.