Let's look at an example.
Let's do a low volatility stock.
WMT is at 85 and change now.
If I sell Jan 65 puts on it, I get 3 3/8. Now, if I wait for the stock to be putted to me, I get to buy it at basically 61 5/8/share, right?
If the stock flies, I can still be putted the stock at that price as long as I don't buy back the puts, right? Or, I can just buy back the puts at a cheaper price to close out the trade, right?
If the stock tanks, I can potentially be stuck with the stock at 61 5/8, even if the stock is $20/share, right? So, the risk is the downside, not the upside, right?
I'm just thinking out loud. It's 6 in the morning, what the hell. hehe
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