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| Topic | Stock Topic 32 |
| masterplum 08/12/21 4:51:25 PM #38: | Forceful_Dragon posted... But then you still have to have enough cash on hand to pay for 100 shares when it's time to exercise, right? Nope. Your option just gets excercised and your shares get sold at the same time. You get the difference. You only need the initial cost of the option. Forceful_Dragon posted... And you have just as much risk associated with the price falling, right? Even if it doesn't fall out of strike range because of how far in the money it was, you are poised to gain much less. Correct. Its leveraged 6X in both directions, just like leveraging any other way. With the caveat that if it falls enough you get a little cushion because you start getting time value of the option back. Forceful_Dragon posted... I think I'm going to start simple and simply sell puts on stocks that I (A) can afford and (B) would not mine owning at a discounted price should the strike occur. This will 100% be less stressful and a good plan. --- ... Copied to Clipboard! |
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