3min chapter

Flirting with Models cover image

Dr. Benn Eifert - Bad Ideas (S3E3)

Flirting with Models

CHAPTER

Should I Sell Puts Down at 50 and Just Get Paid to Wait?

You should sell an option if you're getting paid enough premium to justify the risk that you're taking. Options have negatively asymmetric risk, which means you can typically make a lot more on a long option position than you can lose on the premium. If there was a 10% chance of bad event happening, then you sold a put for 25 cents. That should have been worth at least a dollar because the $10 was the loss you took when it happened.

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