Your HORRIBLE strike price is why you get smoked with options...
(how to fix it right now) Most retail investors sell puts with a strike price 5% ish below the current market price to "build a margin of safety" They usually do this with monthly contracts. Here's the BIG problem. 5% is not a good enough margin of safety, especially with a 1 month contract where you have no tailwinds of growth behind you. (as EPS climbs, the stock will follow that up) The solution is to sell 1+ year puts. You can pick a strike price 20% below the money, get great premium, build a MUCH better margin of safety, have a lower breakeven, & have the tailwind of EPS growth behind you... Easier. Safer. More reproducible. More Profitable in the real world.
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Your HORRIBLE strike price is why you get smoked with options...
(how to fix it right now)
Most retail investors sell puts with a strike price 5% ish below the current market price to "build a margin of safety"
They usually do this with monthly contracts.
Here's the BIG problem.
5% is not a good enough margin of safety, especially with a 1 month contract where you have no tailwinds of growth behind you.
(as EPS climbs, the stock will follow that up)
The solution is to sell 1+ year puts.
You can pick a strike price 20% below the money, get great premium, build a MUCH better margin of safety, have a lower breakeven, & have the tailwind of EPS growth behind you...
Easier. Safer. More reproducible. More Profitable in the real world.