Key insights
- The author discusses selling puts as an investment strategy, emphasizing the importance of considering intrinsic value rather than solely focusing on implied volatility. They argue that selling puts should be viewed as a potential entry point into a stock at a desirable price, rather than a purely premium-collecting trade. This approach suggests a more fundamental, value-oriented perspective on options trading, potentially leading to better long-term investment outcomes.
a lot of the options stuff i see is very IV focused. like if vol is high, sell puts, collect premium, etc. which is fine if you’re treating it purely as a trade
but if you’re selling puts on individual companies, you’re kind of agreeing to buy the business at that price whether you say it out loud or not
so then it feels weird to ignore valuation completely
like two stocks can both have high IV and look “good” to sell puts on, but one might be somewhere near fair value and the other is still obviously expensive
if both drop and you get assigned, those are very different outcomes even though the trade looked the same going in
lately i’ve been doing a very rough intrinsic value check before even looking at premiums. nothing detailed, just trying to answer “would i actually want to own this at the strike or not”
if the answer is no, then the premium probably isn’t worth it
curious how people here think about it do you see selling puts as just a separate strategy, or basically a way to enter positions in stuff you already think is undervalued?