Poll: Is understanding options easy?

I dunno man. It's just that I've heard that selling naked puts is a bad idea. Especially in NG. You options people are nuts.

 

Nah, in NG it was selling calls - naked or hedged - you had to sweat over.

 

So how much should I pay? Premium, I mean, what is a fair price in your example?

 

That's not important to gain intuition into options. Moreover, the contract in my example is not exchange traded so the idea of a "fair price" (that really only concerns an MM or arbitrageur) is sort of vague anyway.

Someone just wanting the intuition of options doesn't need to concerned with the price in my example. The fair price is whatever they decide on. The contract being exchanged in my example isn't even standardized so it could literally be anything. It would probably involve the interest rate return on the value of the home, some insurance, and other things - intuitively speaking.