Jan 24 (edited) ā¢ General discussion
š” Selling Cash-Secured Puts on $SEDG š”
š Trade Overview: I sold 10 cash-secured put contracts on $SEDG:
- Strike Price: $11
- Premium Received: $52 per contract
- Total Premium: $520
- Days to Expiration (DTE): 42 days
š Calculating ROI: Each contract requires $1,100 in collateral (strike price Ć 100 shares). For 10 contracts, the total collateral is $11,000.
ROI=TotalĀ PremiumĀ ReceivedTotalĀ CollateralĆ100\text{ROI} = \frac{\text{Total Premium Received}}{\text{Total Collateral}} \times 100ROI=52011,000Ć100=4.73%\text{ROI} = \frac{520}{11,000} \times 100 = 4.73\%
Thatās a 4.73% return in just 42 days! Annualized, this would equate to approximately 41% ROI if repeated consistently. š
š” Why I Took This Trade:
- Strong Support: $SEDG shows solid technical support near the $11 level, reducing the risk of the stock dipping below this strike.
- Risk-Adjusted Return: The premium offered a good risk/reward balance, especially with the relatively low probability of assignment.
- Capital Efficiency: Selling puts keeps me in control. If assigned, Iām comfortable owning $SEDG at $11/share, a discount from current prices.
š§ Key Learnings:
- Selling cash-secured puts is a fantastic way to generate income while positioning to own shares at a discount.
- Always calculate ROI and assess risk before entering any trade.
š February Progress Update: š° Premium Collected: $1335 / $2000 Goal
ā
Keeping the momentum strong!
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š” Selling Cash-Secured Puts on $SEDG š”
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