/biz/ - Business & Finance

>>51018978
If you’re doing a 1:1 cash secured put, you might want to just buy shares and then sell an OTM put and an OTM call against them for 2x the premium (assuming you are fine with adding to the position if you are assigned on the short put)
>I have 100 shares of RL @ 99
>sold 85 P that expires Sep 16 for 1.90
>I’m fine with adding 100 shares to this position at 85
>sold a 100 C against my shares that expired worthless Friday
>Sep 16 100C’s are going for 3.00
>Sep 16 105C’s are going for 1.50
I’m going to sell another call against my shares Monday.
I like RL and by using margin to buy the shares (25% long requirement), I have a lot more capital available for other positions then if I sold one cash secured put that needed 1:1 coverage.
I basically get 2x the premium by selling both a put and a call.
If I get assigned on the call, cool keep all the premium and make a slight profit on the spread between strike and purchase price.
If I get assigned on the put, also cool I get to add to my position at a 15% discount and keep my premiums.
This is just an example anon. RL is well insulated from demand shortage because rich people still spend money on nice shit during economic downturns while TGT and other stores are seeing a drop in demand.