Buy high dividend stock or etf, and underlying, and sell call and put atm so zero risk on underlying (call sale pays for most of put..but puts usually more expensive on these high div stocks ATM) and settle for dividends which often exceed that net difference of call revenue less higher put cost. Maybe earn 2-3% risk free.
I know dividends can vary but have been pretty stable over years for big etfs and highly capitalized stocks. Another issue is that stock price never exactly matches strikes available, so I would go with just OTM on the call sale strike price for both...since I'm slightly more optomistic vs not.
Might also work in some situations where ATM call and puts are the same, or puts less, even if not high div underlying...but have to check later when live trading so I can see real prices.
This is only for my safe money so happy to get the maybe even 2-3% annual instead of a cd at .5%
I see this is actually a standard option trade on Thinkorswim...its "Collar with stock" when you right click on a strike price, so wondering why not popular?
Anything I am missing?
Submitted January 03, 2022 at 08:26AM by thinkofanamefast https://ift.tt/3pNTz6j
