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https://boards.fool.com/not-exactly-sure-i-understand-your-question-if-34268702.aspx
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| Subject: Re: Naked puts | Date: 8/8/2019 11:41 AM | |
| Author: ICoyote | Number: 8616 of 8621 | |
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Not exactly sure I understand your question. If you mean selling puts just for the income, then yes, I would say that is pretty common, even without cash coverage If you meant specifically singling out stocks below book value, then I am not sure about that. Is your thesis that choosing a stock below book value indicates that it is less likely to fall more? I would be worried that a put with that high of a return while still being meaningfully out of the money would indicate that "the market" thinks there is definitely a risk that it would fall, or else your premium would be lower |
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