ran $TSLA through our put scanner
Nov 20 $382.5 put, $5.85 at the bid. $38,250 cash set aside
a put seller can lose far more than the premium collected
fits our rules. would you sell it?
P&L of a cash secured put
A lot of option sellers found out how painful that downside can be this week.
what is an iron condor? it pairs a put credit spread below the stock with a call credit spread above it. in this example the most the seller can make is $200 and the most they can lose is $300. numbers shown are an example only.
1/6
5/6 the loss is capped. The most the seller can lose is the width of one side minus the total credit. Here that is more than the credit received.
what is a cash-secured put? the seller collects a premium for agreeing to buy 100 shares at the strike, and sets cash aside to do it. the loss can be far larger than the premium. numbers shown are an example only.
1/6
5/6 if it falls below $95. The seller can be assigned and buy 100 shares at $95. The premium lowers the cost to $93.50 a share. If the stock keeps falling, the loss can reach about $9,350 per contract, far more than the $150 premium.
ran $SOFI through our covered call scanner
Nov 20 $18 call, $0.32 at the bid. finishes before earnings
fits our rules. would you sell it?
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intel down 22% and amazon down 12% on earnings. gaps like that are why I want the worst case known before the order goes in
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