Aren't you basically proposing the exact same thing as me then?
No. Superficially similar, yes. Exactly the same, not even close. I'm not advocating selling
naked puts. While I admittedly wasn't explicit, the only way to avoid potential for margin is to sell
cash-secured puts (though, I can see now why that distinction wasn't made clear to you by me). The difference is that if you get assigned against cash-secured puts you have enough cash to cover the assignment. Getting assigned on a naked put can create margin debt.
And what I'm proposing is also distinctly different in that I would actually want to own the 200 shares for the long term. And by
long term, I mean decades, not years. The only exit strategy you've suggested so far is to sell depressed equities to get rid of your margin debt.
In short, my goal is to sell puts to get a discount on my entry position of a stock I actually want to own, and at a price that I want to pay. To me, the put premium is just a
cash consolation prize for
failing to accomplish my main goal.
It seems your main goal is simply to collect cash premiums, and to do that you are willing to go out on margin, and expose yourself to volatility in order to exit margin debt created by a trade gone bad.
We are both employing the same tool (short puts), but for two very different reasons. That matters a lot.
Sell naked puts, and risk losing the entire 200 x $150 when it goes to 0? Why is it when you say it it's a good way to mitigate risk, but when I do it's going to lead to harsh lessons.
It's all about margin risk, and mitigating volatility to me. For myself, I'm pretty intolerant of incurring any margin debt at all. Likewise, I would never borrow money to play poker with. But that's just me. Different folks have different appetites for different levels (and types) of risk.
If you want to dial up your risk (and potential gain or loss), you can certainly use options + margin debt to dial up your risk to whatever degree you feel comfortable with. As I said before, the horror stories of excessive margin debt are well documented in this forum already, and I won't try to replicate that here.
Whether you put 5% out on margin, or 10%, or 20% isn't really the salient point*. The degree that you are willing to use margin defines the harshness of whatever lessons might be in store for you. Only you know what that might be. And again, it's what you plan to do with this margin debt after a trade goes against you that matters.
Just as with options and shotguns, margin debt is just another potential tool. It's not inherently good or bad. For me, personally, it just doesn't fit into my risk tolerance at all. For you, it might be different. In that case, I can only wish you the best of luck, and hope that you don't go overboard with it.
* If you commit to 5% margin exposure, a 50% bear market turns that into 10% of your portfolio. Starting with 10% it becomes 20%, and starting with 20% it becomes 40%. Much beyond that, and you are facing the very real risk of a margin call. How disciplined do you intend to be at keeping your margin exposure capped at your maximum tolerance; whatever that limit might be? Again, volatility becomes a very real risk in trying to manage that scenario. That's not a risk my proposal is exposed to; which is another distinguishing point between our two proposals.