Also, as somebody else posted, you tie up margin collateral and have to be willing--but I don't mind, as you might as well use it for something, and I don't buy on margin.
Also, the collateral requirement for the short uncovered put is recalculated every day as the stock price moves, so if we had a big dip, you might get a margin call. You also have to be financial able to buy those shares at any time if they are "put" to you, though it's unlikely with the longer term puts.
The Stockhawk play (buy 100 shares, sell 1 call, sell 1 put) is called a "covered write straddle". You own the stock and sell a "straddle". (for more see LG Mcmillan, Options as a Strategic Investment, pages 282-300, -- still in the first 1/3 of the book, the ONLY options book :) |
