The document provides a short put selling strategy and details on implementing it. It recommends selling out-of-the-money puts on stocks that are trading near their 52-week low that one wouldn't mind owning. It also emphasizes doing research on the stocks and writing puts for a short time frame. The document then provides a sample stock screener output with various metrics to help identify potential stocks to implement this strategy.

1. Short
Put
Selling
Strategy
M
Elizabeth
Bridge
September
03,
2015
melizabethbridge@gmail.com

2.
The
informaCon
provided
in
this
presentaCon
is
general
informaCon
only.
It
has
been
prepared
without
taking
into
account
your
objecCves,
financial
situaCon
or
needs.
Before
acCng
on
this
informaCon
you
should
consider
the
appropriateness
of
the
informaCon,
having
regard
to
your
own
objecCves,
financial
situaCon
and
needs.
Where
quoted,
past
performance
is
not
indicaCve
of
future
performance.
M
Elizabeth
Bridge
disclaims
all
and
any
guarantees,
undertakings
and
warranCes,
expressed
or
implied,
and
shall
not
be
liable
for
any
loss
or
damage
whatsoever
(including
human
or
computer
error,
negligent
or
otherwise,
or
incidental
or
consequenCal
loss
or
damage)
arising
out
of
or
in
connecCon
with
any
use
or
reliance
on
the
informaCon
or
advice
on
this
presentaCon.
The
user
must
accept
sole
responsibility
associated
with
the
use
of
the
material
in
this
presentaCon,
irrespecCve
of
the
purpose
for
which
such
use
or
results
are
applied.
The
informaCon
in
this
presentaCon
is
no
subsCtute
for
financial
advice.

3. Short
Put
Selling
• Out-­‐of-­‐the-­‐money*
puts
are
sold
on
stocks
the
investor
wouldn’t
mind
owning
• If
the
stock
price
stays
around
the
current
price,
or
advances,
the
investor
keeps
the
premium
when
the
opCon
expires
• If
the
stock
price
declines
below
the
strike
price,
the
investor
gets
assigned
the
shares
*out-­‐of-­‐the-­‐money
=
strike
price
is
below
the
current
market
price.

4. Important
• Pick
good
value
stocks
that
are
trading
near
the
52
week
low.
• Do
your
research
and
make
sure
you
are
comfortable
owning
the
stock
at
the
strike
price.
• Write
Puts
for
a
short
Cme-­‐frame.

5. Run
ValuaCon
Stock
Screener
(Basic
High
Yield
Screen)

6. Pick
Stocks
Trading
Near
52
Wk
Low
Company
name
Symbol
Currency
P/E
ra3o
5y
EPS
growth
rate
10y
EPS
growth
rate
Return
on
equity
(5
yr
avg)
(%
)
Return
on
equity
(Recent
yr)
(
%)
Gross
margin
(%)
52w
high
52w
low
Last
price
%
of
Low
Compass
Minerals
InternaConal,
Inc.
CMP
$
11.11
5.67
15.75
31.81
35.83
36.41
95.68
78.88
79.68
101%
Nelnet,
Inc.
NNI
$
5.8
18.69
8.95
20.08
19.22
60.3
48.8
36.14
36.52
101%
Waddell
&
Reed
Financial,
Inc.
WDR
$
10.74
24.63
11.52
39.35
42.53
49.99
57.33
36.5
37.13
102%
America's
Car-­‐Mart,
Inc.
CRMT
$
10.95
7.49
8.09
14.54
13.33
42.35
57.55
34.84
35.64
102%
PPL
Corp
PPL
$
10.42
16.78
2.16
12.75
12.06
35.38
38.14
29.32
30.15
103%
Dillard's,
Inc.
DDS
$
11.66
53.01
18.68
15.93
16.55
36.61
144.21
89.37
91.9
103%
Alliance
Holdings
GP,
L.P.
AHGP
$
7.96
20.01
20.38
53.56
53.62
37.75
74
34.3
35.36
103%
InternaConal
Business
Machines
Corp.
IBM
$
9.66
9.28
13.51
78.68
90.89
50.14
195
140.62
145.02
103%
Copa
Holdings,
S.A.
CPA
$
8.18
7.51
17.66
22.33
18.19
70.92
127.58
48.38
49.9
103%
Companhia
EnergeCca
Minas
Gerais
(ADR)
CIG
$
3.69
8.02
6.07
25.94
26.23
36.88
8.68
1.96
2.03
104%
Bridgestone
Corp
(ADR)
BRDCY
$
10.08
210.44
10.68
12.45
15.48
37.68
21.71
15.62
16.19
104%
Westlake
Chemical
CorporaCon
WLK
$
9.85
66.07
16.61
22.22
25.4
29.12
98.44
50.01
51.84
104%
SL
Industries,
Inc.
SLI
$
11.81
41.71
12.18
18.06
20.78
26.26
51.96
33.25
35
105%
Graco
Inc.
GGG
$
11.5
35.06
8.97
39.97
36.67
53.84
82.14
63.44
66.79
105%
SK
Telecom
Co
Ltd
(ADR)
SKM
$
8.76
4.3
1.86
13.24
12.76
94.44
31.84
21.7
22.99
106%
Encore
Capital
Group,
Inc.
ECPG
$
9.08
24.44
14.53
17.69
17.63
77.38
46.18
36.4
38.65
106%
CTC
Media,
Inc.
CTCM
$
4.12
1.68
8.62
15.74
18.99
48.64
9.81
1.56
1.67
107%
Fossil
Group
Inc
FOSL
$
8.86
27.91
19.19
30.39
36.81
56.17
115.2
56.01
60.58
108%
Helmerich
&
Payne,
Inc.
HP
$
9.76
12.62
65.11
14.95
15.1
46.55
105.5
49.99
54.61
109%
Yahoo!
Inc.
YHOO
$
4.61
77.75
29.2
19.29
29.03
66.71
52.62
29
31.77
110%
Universal
Health
Realty
Income
Trust
UHT
$
9.81
20.61
8.05
20.5
27.85
71.19
57.55
41.15
45.16
110%
TAL
InternaConal
Group,
Inc.
TAL
$
4.92
9.85
26.21
19.87
18.26
86.85
45.91
15.65
17.3
111%
Textainer
Group
Holdings
Limited
TGH
$
5.74
11.98
9.07
21.06
16.54
89.03
36.22
15.5
17.31
112%
American
Public
EducaCon,
Inc.
APEI
$
10.18
12.97
26.49
25.52
18.53
64.25
37.46
19.22
21.49
112%
Seagate
Technology
PLC
STX
$
9.54
10.88
14.09
56.23
59.56
27.73
69.4
44.46
49.77
112%
Atwood
Oceanics,
Inc.
ATW
$
2.9
6.14
44.15
16.58
14.31
58.41
49.52
15.56
17.54
113%
YPF
SA
(ADR)
YPF
$
8.64
28.22
8.36
16.27
14.92
25.35
37.76
18.9
21.36
113%
Taiwan
Semiconductor
Mfg.
Co.
Ltd.
(ADR)
TSM
$
11.36
24.24
13
25.59
27.86
49.51
25.77
17.32
19.94
115%
CNOOC
Ltd
(ADR)
CEO
$
5.45
15.36
13.1
21.68
16.69
59.94
202.33
98.05
115.17
117%
Sasol
Limited
(ADR)
SSL
$
7.39
16.78
18.6
19.09
18.46
55.99
59.82
27.32
32.11
118%
Publix
Super
Markets
Inc.
PUSH
$
8.31
8.64
9.17
17.8
16.13
28.04
25
17
20
118%
The
Western
Union
Company
WU
$
11.19
5.57
4.9
109.25
70.88
41.61
22.84
15.31
18.05
118%
Twenty-­‐First
Century
Fox
Inc
FOXA
$
6.92
32.4
18.94
22.16
48.35
35.97
39.27
22.81
26.95
118%
Tandy
Leather
Factory,
Inc.
TLF
$
11.22
19.44
12.01
15.72
16.44
61.61
9.97
6.52
7.71
118%
Ever-­‐Glory
InternaConal
Group
Inc
EVK
$
3.9
30.8
18.01
24.56
25.22
28.9
7.2
3.17
3.81
120%

7. Research
Two
really
great
resources
for
researching
your
stocks:
hnp://seekingalpha.com/
hnp://www.gurufocus.com/
Bonom
Line
–
make
sure
you
feel
comfortable
owning
the
stock
at
the
strike
price.
Do
your
research
and
evaluate
the
strike
price
–
is
it
a
fair
price
for
the
stock?
The
stock
market
oren
moves
in
irraConal
ways.
You
have
to
be
comfortable
owning
the
stock
if
your
opCon
is
exercised.

8. OpCon
Chain
-­‐
CMP
For
example,
consider
CMP,
currently
trading
at
$80.15.
An
out-­‐of-­‐the-­‐money
put
with
a
strike
price
of
$75
can
be
sold
for
$1.35,
resulCng
in
a
credit
to
your
account
of
$135.
The
$135
is
yours
to
keep,
no
maner
what.
Worse
case,
you’ll
end
up
paying
$7,500
for
100
shares
of
stock.
Subtract
the
$135,
and
your
effecCve
basis
is
$7,365,
or
$73.65
per
share.
Important
Note:
One
Put
Contract
=
100
Shares

9. The
Order
(InteracCve
Brokers
Web
Platorm)
Important
Note:
One
Put
Contract
=
100
Shares

10. What
happens
next?
The
opCon
contract
expires
on
October
16,
2015.
Regardless
of
what
happens
to
the
stock
price,
you
collect
the
opCon
premium.
If
the
stock
price
dips
below
$75,
the
100
stocks
per
contract
are
assigned
to
you.
You
have
to
feel
comfortable
owning
the
stock,
holding
it,
and
waiCng
for
the
price
to
go
back
up.