Puts as a purchasing option?


So I read somewhere on reddit that taking puts on stocks you like is a great way to buy them, you make money for signing the put, you want to buy them the stock at the put price, it's a win win?

Just want to make sure I got this right.
Say stock is at $5, I think it's a great buy at $4 and think it will probably drop to there, I take a put option at $4 where the bid is $0.18, I have the cash on hand in account in case I'm assigned, so I make $18 for each put option regardless of if I get assigned or not.

Other than the stock going to less/zero, is there a down side I'm missing?


Comments

Leave a Reply

Your email address will not be published. Required fields are marked *