Part 5/10:
- Palantir & Tesla: Even for higher-priced stocks like Palantir (~$123) or Tesla (~$339), traders can sell puts at lower strike prices—like $50 for Palantir or $50 for Tesla—and collect substantial premiums relative to the required margin.
How To Execute These Trades
The process is relatively straightforward:
Select a Stock and Strike Price: Ensure it’s a stock you’re comfortable owning at that level.
Check the Option Chain: Determine available expiration dates and current bid-ask spreads.
Decide on an Expiration: Longer durations provide more premium but also more market risk.
Set Your Premium: Usually selling at the middle of the bid-ask spread, e.g., $0.30 for a contract covering 100 shares, equating to $30 upfront.