I don’t understand… If I sell a put option of VT strike 70 for August for 1.60 I have 7000 + 160 = 7160 Not 188
Are you sure you understand how works the options?
I own nothing to anybody! I have the obligation of buying 100 VT for 70$. They’ll assign the VT’s and I’ll finish with 100 VT in my portfolio and -7000$ in my account.
With your calculation, I’m completely lost.
Perhaps I misunderstood that you meant either buying the VT or selling the puts?
Yes, thank you, I understand how options work, but obviously I don’t trade the same sort as yours 
.
I always see options with cash settlement.
Let’s take an example, a NASDAQ 100 Put. The holder of the option has the right to get from emitter of the option (in that case UBS), in cash, the difference between the strike price and the current price, until expiration, if the option is in the money. It’s all described in the term sheet.
What are the details of your VT Puts (term sheet, ticker, …) ?
Sorry about my comment. Reading now, I see that is a bit rude from my side, I apologise.
I don’t know where and how are you trading options but I do in IB exactly as described in this video:
By the way, in the IB youtube channel there are lots of good videos about strategies, etc.
I never use options to “speculate” I only sell put options when I want to buy a stock or ETF for less money that its current value. Never go in margin.
Also I sell call options when, for example I have 100 VT and I want to sell them at the current price, or up a bit. I get a prime to sell in 3 months something that I want to sell now. So, I win always .
It’s only psychologically hard sometimes when the ETF is now 100, you sell the call option in 110 and in maturity you see that the ETF is at 150! But, if I was selling at market price now, I would get 100. Selling the call option, I “assure” selling by 110 and I get the prime.
BTW, your example is not a option, is a warrant… Just to clarify.
Regards.
Oh, maybe on your settlement question (for options ITM): afaik you get physical delivery of the securities at expiry. I don’t believe you’ll have transaction costs on this delivery at Swissquote, but I have not experienced an expiring option ITM yet. There’s one possibly in these conditions by June 19, so I might be able to tell you more the week after.
@Gojuryu Turns out it apparently depends on the market / exchange where you sell the options. For two of the US securities I sold CSPs on, it was cash settlement when they were ITM at expiry on June 19 and I had to cough up the transaction costs at my broker to buy them (on the next trading day after the expiry day). I still made money on top of “saving” the transaction costs, but going forward I’ll pay attention to be even more greedy for a high premium when selling CSPs. 
For some exchanges there’s apparently physical settlement (Eurex, I believe). My guess is that for most options / exchanges is cash settlement.
Quick question for the experts. Assuming you’re in a country with strict priips requirements (eg France where even being classified as pro is hard, being HNW is not sufficient), if you can get a broker that let’s you trade options (with priips, would IB let you?), you can workaround the restrictions and acquire VT through options?
Hi,
If you have an IB account from the EU, you can. The stocks are going to be in your portfolio if the execution of the option is done.
I don’t know exactly France but for Spain that is more or less the same as France, I have several references of people doing that to either get the Vanguard’s ETFs or getting the prime if they don’t be assigned.
Regards.
For the tax authorities to know that you traded options they would need to do a thorough audit as one does not have to declare it since it’s not taxed by default. Sure you have the automatic exchange of information in place but that only publishes the amount of gross sales you did during a year not individual trades. That is, unless you get to sell a huge amount of individual stocks and put that in your tax statement when you declare the corresponding dividends or your broker declares a huge gross sale number (i.e. you do a lot of it…) that’s not in line with you tax statement and your data gets checked I don t see how the tax man can dig into whether you traded options ^^. Of course if you are able to generate several 100k from this and your wealth suddenly explodes because of that you may have issues, otherwise I don t really see how you they may become aware of this hobby…
To be sure I double checked the statement sent by my bank in France in the scope of the automatic exchange of information and it’s indeed only the proceeds of the sale of assets that is put but it does not say what assets were sold, so I guess unless you indeed sell a lot compared to the declared wealth there’s no reason for the tax man to dig into your trades. If you want more information on this the reporting standard is called CRS.
Thanks for the interesting thread.
I tried it with IBKR last week. Sold puts for a bigger ETF in two months from now. I am happy to get thet ETF at 10% discount or alternative make 1.5% every 2 months. That being said, I noticed big swings given the big spread and I could have made a lot more if I had waited just 2-3 days.
What if there’s two months where the market goes up, won’t you miss on that? What if it’s 4 months?
What would backtesting this gives you?
Yes I miss any upside but still have the payout. If it dips I buy at 10 percent discount and still have the premium.
I can see whether those shares get allocated within the next two months. If not, I can repeat the process (at best six times per year ).
Currently sitting on 30 percent cash. So a good way to get yield on that without buying super low yield bonds etc.
It sounds a bit weird, basically you’re getting paid by people who want to insure against a large drop in the index.
If you also hold that index, aren’t you somewhat betting against yourself? (if it goes up you don’t get rewarded much, if it goes down by a lot you get a lot more losses).
When backtested how does it compare to a bond/cash position?
I have fired recently and just need 2-4 percent on my cash and low volatility. So 9 percent would be excellent. Eventually I will get the ETFs and that is fine too (since I will feel good about the entry point).
For the alternative, I don’t like bonds in general since debt can grow unlimited - unlike gold or company shares.
Do someone know it options on Vanguard ETFs are American or European type ?
I’ve found somewhere that options on ETFs should in general be European type but I had one exercised today (expiration date being tomorrow) so I would guess that was American? 
Is there a way to discover it from the option chain ?
Thanks @Julianek, that Investopedia article was my source of information indeed. But their statement is quite general and I was looking for a way to discern if the option is American style or not.
I had read that one way to quickly identify whether an Option is a European and American style is to look at the nomenclature of the Option contract. If there is CE in the contract name then it means CALL European style option. Similarly, CA in the contract name means CALL American style, PE means PUT European style and PA means PUT American style option.
But if I look e.g. at this I do not find any CA/CE reference… how to be sure ?