Selling slightly OTM-Puts-Good Idea?

It is stretching but that is the way people talk.

 

I think it boils down to how fast you can cover a loss from regular income (salary for most people).

If you lose a month's salary, it's not the end of the world. If you lose a year's salary, it starts to look "not so limited as I thought". If you lose 10 year's salary, does it matter that "stock only dropped 50%, that's not 'unlimited'"?

 

"But your lifetime savings are like $200,000 and you place them all on selling naked puts and the stock value drops 50% overnight. You just lost HALF OF YOUR LIFE SAVINGS in a single blow."

True if you do it with an individual stock. I rather own an ETF if things blows up. Then I'll be forced to stay long for longer.

 

Not sure if the OP was talking leverage in the manner you guys are..He seems to be looking at stocks where the IV % rank is above 90.....

 

That´s right. I would only sell one put and not more on leverage. For me it´s already dangerous enough. I don´t need an extra thrill ;-)

 

I was in the ratio writing business,but not at these levels....

 

You should have placed all that put money into Hertz back in April and May of 2020!! You would have come out smelling like roses...

Yeah, back test that one...

 

I'll leave that to re-org/high yield studs such as yourself..

 

Hindsight is 100 per cent.

 

Not too sure he's right in hindsight. The stock is lower and going thru a re-org...not sure where he is going on that one