Need some advice.
Planning to buy some stock, and was thinking going the route via selling a put option.
If I sell a $200 2021 put which will pay me $4500.. Then worst case I wont get any stocks, but keep the $4500. Best case, I get 100 stocks for only $15.500? (pay $20.000 -4500 which I got paid for the put option)
The only downside is - it will be a covered put, and this will tie up $20.00 for two years.. and if SP soars I miss out on these 100 shares.
Best case - SP dip below $200 the next weeks and the PUT is exercised. And I get share now for $155 and am free to sell/rinse and repeat?
Am I correct? Completely new to selling options.. only experience with options is I have been burned a lot on calls the last years. :-D I am sick of loosing on time-cost, was thinking Id be on the other side of the trade for once.;-)