Where I set my strike when selling a put:


~10% BELOW the current price.
But only when the company is already below intrinsic value.
Think about what that does:
The stock is already cheap.
Then I give myself another 10% cushion under that.
Then I go 2 years out to give EPS time to grow.
THEN I collect premium on top.
For me to lose, a company I think is undervalued has to fall another 10%+ and stay there for 2 years...
Margin of safety on top of margin of safety.
That's how you beat the market.
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