Retail investor: When stocks get cheap I sell 1 month puts. Grab the premium while the fear's hot.


Me: How much you collect on the last one?
Retail investor: About $1,000. Not bad for a month.
Me: Same stock, same fear, same dip... a 12 month put was paying ~$10,000. You took a tenth of the paycheck.
Retail investor: But then I'm stuck in it for a year, right?
Me: no.. I sold 1 year put when it was compelling & closed them 4 months later... at 75% profit. Sentiment flipped, contract collapsed in value, I took the win & redeployed.
Retail investor: Wait... so you collect 10x the premium & STILL get out early?
Me: Long duration is bigger premium up front at a time the setup is solid. So more money to reinvest back in. Short duration is small premium & not capitalizing fully when there's a compelling setup.
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