Retail investor: I looked at your strategy. Selling puts without the cash sitting there?? That's uncovered. That's how people blow up.


Me: You have a HELOC on your house?
Retail investor: ...yeah, actually. Never used it though.
Me: So you have access to money, secured by an asset, that costs you NOTHING until you draw it. Reckless?
Retail investor: No... it's just sitting there as a backstop.
Me: That's exactly what this is. My base portfolio is the house. The puts are secured by it. I pay zero margin interest because I'm not borrowing anything... I'm COLLECTING premium.
Retail investor: But what if everything drops & you're assigned?
Me: Ratios. I never sell more puts than my base could cover even after a 50% crash. The "reckless" version is real... it's called being over-leveraged with no ratios. That's not this.
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