4 ms·

His point was if you are about to literally buy the stock, there is no downside to selling a put (upside is a different story of course). Especially Cash secur

• chollida1 4y ago
  Well that's where you are wrong. There is potentially a huge amount of downside. The moment you write the put, you are explicitly stating when you buy the stock, if the put ends in the money, as dictated by the expiry. And if the stock dips far below that amount by the expiry then you have alot of downside that you wouldn't have had if you didn't write the put. Nothing is free, you write a put and the stock goes down you end up owning the stock that you are ownings at a loss from day one.