How to make more profit with Sell Put
It is better to buy shares when bullish expectations are strong than to short put.
I woke up this morning and tesla was driving high. Based on 100 shares, Tesla would have received $3,700 at the close of trading yesterday, but the sell put option would have received only $100 in premium.
It is obvious that the return of sell put is not satisfactory when comparing the return of stock. There are two ways to improve it: the exercise price or the maturity date.
The payoff of an out-of-the-money sell put comes from the time value, while delta determines the rise or fall of the option premium at different call prices. Extreme out-of-the-money put options have very small delta values and very low premiums. The royalties are earned mainly by time loss, and when the market is broad but the share price is high, the income is low.
But remember to close the position manually when the market is right. I have had several long-term sell put profits suddenly turned down. Although receiving stocks is okay, but the mood is not very happy.
Can call be bought in this case? After comparing yesterday's options at different strike price and expiration dates, I cannot make such a recommendation given the current market environment and my own risk tolerance.
Today sell put:
| Ticker symbol | Annualized income | Expiration date | strike price | Premium |
| $TSLA 20220520 900.0 PUT$ | ———— | 2022/5/20 | 900 | 30 |
| $NVDA 20220408 245.0 PUT$ | 13% | 2022/4/8 | 245 | 1.14 |
| $AAPL 20220408 165.0 PUT$ | 10% | 2022/4/8 | 165 | 0.51 |
| $AMD 20220408 106.0 PUT$ | 16% | 2022/4/8 | 106 | 0.57 |
| $QCOM 20220408 140.0 PUT$ | 7% | 2022/4/8 | 49 | 0.35 |
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Thanks