How To Gain From Selling Put Options in Any Market
As Tesla’s (TSLA) stock shed more than half its value from 2023 to 2024, many who held the stock wished that they had waited for better prices. In contrast, those who sold put options on the stock during the decline not only earned income through premiums but also positioned themselves to buy Tesla shares at significantly discounted prices. This is the appeal of selling put options.
Consider investors who thought Tesla at $250 looked expensive in mid-2023 but were interested in buying up shares if it dropped to $200. Rather than simply placing limit orders, they could have sold put options at that strike price. This strategy would have two advantages: immediate income from the option premium and the potential to buy shares at their…
