Building a portfolio "from scratch"
I'm curious about your opinion on coming into this without having any individual stocks held in a portfolio, and how to build something up to really play in the options space.
For me, I do have a decent portfolio that's currently invested in index funds.
  • Do index funds have options, and if so, is there any prevailing opinion about pros/cons of trading them vs. individual stock options? (yeah I can check my specific ones on thinkorswim)
  • If I'm going to sell cash-secured puts, does the cash need to already be in actual cash, or would my existing holdings be able to work as collateral and I sell that only if the option is exercised? (I'm guessing the former, as the latter would be an instance of using margin, but you tell me)
  • When considering repositioning my portfolio with the intention of using it as a basis to trade options, beyond 1) buying stocks that generally have active options trading, and 2) being high quality stocks to own in general, are there other major factors I should consider? Certain sectors or cap size that tend to be better, or anything else?
For anybody else reading this, now or in the future, I'm not planning to completely exit my index funds to go nuts in options... I have a larger part of my portfolio that's in index/mutual funds that I'm not touching anytime soon. I don't want to be interpreted as advocating for being at all reckless with a portfolio 😊
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Julie McCoy
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Building a portfolio "from scratch"
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