and my highlights. It did imply to me the money is eventually going to be invested.
Please consider the option writing is not what I’d do, nor recommend a beginner. But it’s a valid point discussing, even if it’s only a mental exercise.
Under the premise that they want to invest in given fund or stocks eventually, write puts somewhat below today’s price, what can actually happen? Compared to investing everything at once, or (as was asked indeed) just park it:
- Price goes up: You missed out on the gains, but that’s taken into account with delaying investing. At least you’d still have pocketed the premiums
- Price below today, but above strike price: Waiting paid off. You get to buy cheaper and you’ve got the premiums
- Price down significantly. Ok, you lost on that option trade, that’s the risk. That risk is always there when investing. But you’re still better off compared to buying today (due to set strike price). Plus, the premiums.