Been doing similar trades for the majority of this year. The best one I remember was selling front month $4 AMC puts for around $1 before it reached meme status in January. When the stock got meme'd to ~$20/sh, the value of the puts actually increased due to the IV spike and I sold more. Crazy annualized returns when IV is 800%+
I like this idea, but I think a better strategy would be selling the $10 July puts and buying the $7.50 puts. At least this way, your downside is capped, and the stock would have to fall below $8.60 (the breakeven point) at expiration to start losing money. Also, margin requirements are far lower for this trade than selling naked puts.
So basically, this 7.5/10 bull put spread has a max loss of $110 and a max gain of $140. To start losing money, the stock would have to fall by about 20% from here.
I like the idea, and have been doing similar ~1 month put sales for 7-10% returns in AMC, DNN, GME and MACK.
Been doing similar trades for the majority of this year. The best one I remember was selling front month $4 AMC puts for around $1 before it reached meme status in January. When the stock got meme'd to ~$20/sh, the value of the puts actually increased due to the IV spike and I sold more. Crazy annualized returns when IV is 800%+
I like this idea, but I think a better strategy would be selling the $10 July puts and buying the $7.50 puts. At least this way, your downside is capped, and the stock would have to fall below $8.60 (the breakeven point) at expiration to start losing money. Also, margin requirements are far lower for this trade than selling naked puts.
So basically, this 7.5/10 bull put spread has a max loss of $110 and a max gain of $140. To start losing money, the stock would have to fall by about 20% from here.
I just sold a small position in the naked puts hoping to get the stock put to me.