The Trade at a Glance
- Account Size: $100K
- Underlying Stock: MSTX
- Strategy: Sell 1 Cash-Secured Put
- Expiration: March 28
- Strike Price: $33
- Premium Received: $81
- Margin Requirement: $3,300 (secured cash for 100 shares)
Why This Trade Makes Sense
Income Generation
Selling this put immediately generates $81 in premium, adding to the account’s cash flow while keeping risk defined.
Stock Acquisition at a Discount
If assigned, you would purchase MSTX at an effective price of $32.19 ($33 strike – $0.81 premium), securing a potential discount entry.
Capital Efficiency
With $3,300 allocated, this trade aligns well with a $100K account, allowing for diversified option positions.
Risk Management
- Max Loss Scenario: If MSTX falls to zero, the potential loss is $3,300 – $81 = $3,219.
- Mitigation Strategies:
- Monitor price action and roll if needed for additional credit.
- Consider closing early if the position reaches a high percentage of max profit.
- Ensure comfort with owning MSTX at $33 in case of assignment.
Final Thoughts
Selling cash-secured puts is a strategic way to generate income while maintaining control over risk. For a $100K account, this MSTX trade provides a solid balance between premium collection and capital preservation.
📢 Follow us on X for real-time trade updates! @ThetoplistC
#OptionSelling #OptionCredits #StockMarket #Investing #PassiveIncome