Retail investor: Market dipped so I took out a margin loan & bought the dip. Bold, right?


Me: You paid interest to buy the dip. I got PAID to buy the same dip.
Retail investor: ...what?
Me: You borrowed at 10%+ & bought shares, praying the bounce outruns the interest. I sold 1+ year portfolio secured puts... collected cash that day... & my base secured it. No loan. No interest. Zero.
Retail investor: But if it bounces hard, I make more than you.
Me: Not true... I have no cash drag like a cash secured put. I am fully invested and paying no interest like you. This is a portfolio secured put, remember...
Retail investor: Same bullish bet... completely different outcome...
Me: Being on margin means paying to hope it works out. Selling portfolio secured puts means I get to use house money for free and capitalize on the same thing. As long as you keep ratios in check you'll be just fine in the deepest of crashes.
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