The Biggest Mistake Investors Make When Selling Put Options

During their recent episode of the Value Options Letter and Acquirers Podcast, Travis and Carlisle discussed The Biggest Mistake Investors Make When Selling Put Options. Here’s an excerpt from the episode:

But what’s cool about this strategy is that you’re getting 1.2%, basically, in 14 days. And your worst case scenario is you’re buying a stock you want to own at a more compelling valuation. Now, in that window, we’re going to have earnings come out.

And so that’s why you get a little higher volatility than you normally would get. So right now, this is kind of a fun time for option sellers. Now, of course, they could bomb earnings, they could bomb their guidance, and the stock could easily fall below 225.

So you only want to do something like this if you’re willing to own the stock. It’s not, oh, gosh, we’re getting exercised, we lost. It’s not that whatsoever.

That’s a key principle of the value options letter, which is different than the way 99% of people use options.