No. of Recommendations: 13
What do folks think about selling the 450 puts here, even for a month, seems like their offering value.
If you're going to do that, I recommend going out more months. The premium is simply bigger, meaning a bigger discount for any given strike price you pick. Also a more meaningful amount of return if they expire worthless rather than relative chump change.
Around year end book will probably be somewhere around $322 at a guess. (or near that, on trend, which probably matters more).
Random example, sell January $440 put for about $12, entry price about $428, which might be around 1.33 times book at the time of expiry. Hard to imagine that being a bad outcome.
Or you get 2.79% on the capital you tie up, which is a return of 6.2%/year rate on top of whatever you're already earning on the cash. IB is paying 3.83% at the moment, so if that holds it's a rate of 10.01%/year.
Tune the numbers to get two outcomes which you consider equally attractive. Because, sure as shootin', you'll get whichever one looks worse at the time : )
Jim
