Making Your Money Work Harder For You
With fixed deposit rates currently ranging from 2.7% to over 3.6% , there are smarter strategies for passive investors to generate higher returns. One approach is to sell cash-secured put options against your fixed deposits. Cash Secure Put Option Selling put options requires the cash be held in reserve in case the stock price falls below the option's strike price at expiration. However, by treating your fixed deposit cash as collateral, you can generate additional income from option premiums while keeping your principal aside earning an extra yield as well. Some key considerations for this strategy: Thoroughly understand options and their risk-reward mechanics before trading. Options derive value from expected stock price movements based on a company's fundamentals. Only write put options on companies you wouldn't mind owning long-term if assigned the shares. Carefully research businesses to ensure solid fundamentals and prospects. Target options with minimum 6 month expi...