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Old 09-22-2020, 03:56 AM
Gwaihir Gwaihir is offline
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Join Date: Mar 2020
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Remember, in either scenario, whether you're setting a limit buy, or selling a put to hopefully obtain shares at a discount from today's price later, you're collateralizing that money to the broker until the buy of the stock is triggered or the option contract's parameters are met and is triggered, the only difference is you're not getting paid to set limit buys while you're waiting to see if you get the stock at your preferred price or not.

you can also sell puts set AT the stock's current price if you think 30$ is a good price, but they aren't paying a dividend for another 9 weeks, so you sell a put contract 8 weeks out, so you preferably take possession just before it pays it's dividend. Currently, a 30$ strike for a PUT sold for November 20th pays you $249 for the 3000$ invested in 100 shares (8.3% premium) but if the price goes up to 30.01 or higher by then you'll only get the $249premium, and your $3000 back in November. That's the "risk" you're taking aside from the risk you'd be taking anyway if you had no plans to sell the stock (even if it pulls back) with a buy-and-hold-long-term perspective.
Last edited by Gwaihir; 09-22-2020 at 04:18 AM..
 


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