Hello,
I discovered option trading recently and was even more interested when I learn that Warren Buffett himself does that (
https://www.re-thinkwealth.com/warren-buffett-invest-options/).
He does long dated put in order to buy
stock he loves at lower price! Isn't that great? But stock and be paid for owning it!
Here's what I did:
- Sold 1 Tesla put at $690 expiring in Jan 2023 with a premium of $198.89.
- That means I guarantee to buy 100 Tesla shares in 19 months at $492 ($690-$198 = 30% discount of the current price).
- I received $19800 in my account doing this strategy, which is about 30% discount from the stock price ($69k), and equivalent to 1.5% interest / month. (30%/19month = 1.5%/month)
That sounds amazing, the big risk is of course if Tesla drop more than 30%. But apart from that, it looks like a great way to make money. Bonus is that I receive the cash from Day 1 and I can do anything I want from it.
Isn't that great? I feel like it's earning too much for doing nothing, I'm going to
get about $800/month just owning this option!
Do you do that as well?