Ok, so today, I made a dumb mistake. I wanted to do a short put (CSSP) on META for May 15, but instead of doing one contract, I did 10. It executed, so I guess I have enough margin to cover, but definitely not enough cash to buy 1000 shares. So, the trade I was going for is a bullish to even trade on META, I decided to buy puts under the ones I sold to make it a Put Credit Spread. The credit I received for doing 10 contracts is about $1500 whereas the credit for the short put on 1 contract which was my original intent would have been roughly $500. Now, my original thought was to get the shares, but with a credit spread, I am now just looking for premium erosion. Just wanted to get people's thoughts on the trades. Both are good for a bullish or sideways move, but one gives me shares if the stock keeps moving down.
Posted by No_Experience_167
2 Comments
you basically shifted from wanting shares to just playing premium. nothing wrong, just a different trade, given you didn’t have cash for assignment, the spread is probably safer anyway. just know your max loss and stick to the plan
Confusing post. The credit for 10 contracts was 1500, which means you SOLD and collected 15 on each option. But then you say for 1 short put was 500, so does that mean you Sold a 595 Put or so.
So what are the strikes and what did each vertical bring in. If this is a credit spread you sold the higher strike . Sounds strange that your platform did not show the Buying Power (Not Margin) required BEFORE the trade.