Real world example…
I just sold 1
$NBIS $182.50 Cash Secured Put expiring 7/10 for $13.33/share.
Trade Details:
• Premium collected: $1,333
• Capital secured: $18,250 (100 shares × $182.50 strike)
• Return on capital: 7.3% ($1,333 ÷ $18,250)
• Time to expiration: ~30 days
Potential Outcomes
Scenario 1: NBIS stays above $182.50 by 7/10
• The put expires worthless
• I keep the full $1,333 premium
• No shares are purchased
• 7.3% return on the capital secured in about a month
Scenario 2: NBIS falls below $182.50 by 7/10
• I get assigned 100 shares at $182.50
• I still keep the $1,333 premium
• My effective cost basis becomes $169.17/share ($182.50 - $13.33)
Guys do you understand what I am saying?
With $18,250 of capital, I’m locking in a 7.3% return in ONE MONTH.
Worst case scenario, the stock I’m buying drops below the cost basis and in that case, you just begin the wheel strategy and sell covered calls until you sell the stock for higher than your cost basis, or if you don’t want to buy the stock at that cost basis anymore, you roll the option to a lower strike…
$18,250 in capital can only get you a $90k rental property, which will make you at the MOST a few $100 dollars a month.
That’s if all goes perfect and you have no issues with the property or tenant, which is highly unlikely.
Also, you need to think about what kind of rental property you’d be getting at a $90k price point.
Probably not the best location or tenants if I had to guess…
I want to hear your opinions, do you prefer selling options or rental properties?
Selling Options > Rental Property Income