No. of Recommendations: 1
Thanks, very clear!
Agreed, if one is happy with both possible outcomes then this could be a good investment:
(1) collecting premium and shares called away
(2) collecting premium and shares put to you
You will need an additional $9,000 of cash
One could put this into treasuries at around 4% interest when initiating the position.
This $9,000 set-aside (to make the sold put a 'cash secured sold put' to avoid any possibility of an awkward margin call) affects the calculation for return on investment.
