Sold Xpeng Puts

I like the stock Xpeng (XPEV). I was just going to buy 1000 shares at $47. And I like it at that price! I took a look at the Puts to see if I could get a nice premium and try to get the stock a little cheaper at $46. The premium for the $46 Put to expire this Friday was 90¢. I decided to sell 10 XPEV 2/5/21 $46 Puts for a premium of 90¢.

Sell to Open 10 XPEV 2/5/21 $46.00 P @ 90¢ (+$900)

Like I said, I was going to buy the stock today at $47. With this trade I have a chance to buy the stock at $46 and get paid $900. This option expires in 2 days. If I get assigned, great! I’ll own the stock I wanted at a lower price than it is today. And keep my $900 premium.

If I don’t get the stock put to me at $46 I still keep the $900.

If the stock tanks and goes down to $45, well I would have owned it anyway at $47 because if I didn’t sell the Put I would have bought the stock today. Either way I would sell Calls on the stock, whether I own at $47 or $46. But only one way I get $900, and that’s selling a Put.

If the stock is put to me at $46 the $900 is a 1.9% return. If the stock is not put to me the $900 is FREE money with no investment.

Nothing in this game is guaranteed! I think this trade gives me a good chance to make money.

This trade gets a Risk Factor 1.

Successful trading,

Steve

The Options Coach.