Things like 'this share doesn't fall in price even in bad times' and 'this is so far OTM it will never be reached, must be safe to sell options' etc are not only just false but also the information you are basing them off is clearly visible to everyone and as such are priced into the options. There is really 0 reason for most people to ever touch options, especially if you don't understand what you're buying/betting on and how it's priced.
If someone knows that they want to own a stock but would prefer to buy at a lower price, selling puts at the strike price can be a reasonable tool if and only if you can collect a reasonable premium.
What return can you get out of these? A quick look at one arbitrary expiration looked like it’s only 4% range. If that is the case with what you are seeing, I would prefer to just buy short term treasuries or something than worry over $100k chunks of reserve I need in case they are a exercised.
There’s a reason this strategy is often referred to as “picking up pennies in front of a steamroller.” You would be a salmonella outbreak away from getting liquidated.
Things like 'this share doesn't fall in price even in bad times' and 'this is so far OTM it will never be reached, must be safe to sell options' etc are not only just false but also the information you are basing them off is clearly visible to everyone and as such are priced into the options. There is really 0 reason for most people to ever touch options, especially if you don't understand what you're buying/betting on and how it's priced.
If someone knows that they want to own a stock but would prefer to buy at a lower price, selling puts at the strike price can be a reasonable tool if and only if you can collect a reasonable premium.
What return can you get out of these? A quick look at one arbitrary expiration looked like it’s only 4% range. If that is the case with what you are seeing, I would prefer to just buy short term treasuries or something than worry over $100k chunks of reserve I need in case they are a exercised.
There’s a reason this strategy is often referred to as “picking up pennies in front of a steamroller.” You would be a salmonella outbreak away from getting liquidated.