Get paid to wait for your price, with no guarantee you'll get the shares. This lesson shows how a cash-secured put works, and what you take on when the stock falls right past your strike.
After this lesson you can
- Work out a cash-secured put's real cost, breakeven and worst case
- Explain when a sold put beats a limit order, and when it doesn't
- Compare strikes and expirations by premium, real cost and delta
- Explain why a naked put's small margin requirement can lead to an oversized position and a margin call
- Know what happens after you're assigned, and avoid the five mistakes, starting with selling puts on a stock you don't want to own
Chapters
- 0:00Paid to wait for your price
- 1:57How a cash-secured put works
- 3:35What it pays at expiration
- 5:25Versus a limit order
- 7:00The catch
- 8:42Choosing the strike and expiration
- 10:44Without the cash: naked puts
- 12:42Assignment and the wheel
- 14:37Five mistakes
- 16:17The whole lesson on one screen
Practice in the game: Level 3 · The Catcher
Practice with:Income Screener