Message Font: Serif | Sans-Serif
 
No. of Recommendations: 1
Hi yvanog,

In general, as with any put options, if you sell the put, rather than buy the stock, the things you're (maybe) missing are:
a. You don't get the dividend throughout the term
b. If the stock is above the strike price by expiration, you miss any potential gains and the stock "runs away from you" - you will not be an owner of the stock. However you get to keep the premium, so what you're actually missing are any gains above the strike price.

Hope this helps,
-Shiri

MDP Home Fool - a community member like you
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.