How to Use Naked Puts to Earn Income and Buy Overvalued Stocks

in hive-167922 •  4 years ago 

In this clip from episode 13 of the LEO Roundtable, we talked about selling naked puts in order to buy a stock that you think is overvalued, but one that you also want to own in the future. This practical guide is something that I think many people can benefit from.

As I continuously monitor the stock prices, I’ve grown intimate with how the stocks tend to move — their volatility, general reaction to various trends in the market, etc.

Obviously, I can’t predict the future. Just like everyone else (except maybe the Fed), I don’t have a crystal ball or a magic button that can tell me what a stock will be worth tomorrow.

So when stocks are trading above their fair value — which I believe to be the case for stocks on my personal watchlist like SQ and TSLA — what can we do to stay engaged with the stock price? What strategies can we deploy to earn income while we wait for our buying opportunity?


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