ilmscore | Cash Secured Puts Explained: Options Trading for Beginners

Cash Secured Puts Explained: Options Trading for Beginners

Published: 2023-09-12
Status: Available | Analyzed

Predictions from this Video

Total: 4
Correct: 0
Incorrect: 0
Pending: 4
Unrated: 0
Prediction
Topic
Status
When Sirius stock falls to $4.40 after selling a cash-secured put with a $4.50 strike and receiving $0.32 premium, the effective purchase price is $4.18, representing a 15% discount from the original $4.89 price.
"by going with a cash secured put you bought Siri for 418 so you got a much better deal on the stock you got in at a 15% discount"
SIRI
Pending
If Sirius stock plummets to $1 after selling a cash-secured put with a $4.50 strike and receiving $0.32 premium (effective purchase price $4.18), the investor would be down $3.18 per share, or 76%.
"if Siri plummets to $1 you will be forced to buy Siri for 450 so yes you did get paid 32 cents for making this deal so your true purchase price is 418 but still the stock fell to $1 this means that you are down $318 which means that you're down 76%"
SIRI
Pending
If Sirius stock falls to $1, an investor who bought it outright at $4.89 would be down 79%, whereas an investor who used a cash-secured put (with a $4.50 strike and $0.32 premium) would be down 76%.
"if you thought that ser was a good buy at $489 and you bought it at $489 if it falls to $1 then you would be down 79% if you do the cash secured put then you would be down 76%"
SIRI
Pending
Selling cash secured puts on Sirius with a $4.50 strike price and receiving $0.32 premium can yield a 7.1% return in one month, which annualizes to 85%.
"if you make 32 cents by risking 450 that is a return on investment of 7.1% in 1 month that is an annualized rate of return of 85%"
Cash Secured Puts
Pending