Robinson, J. [Options Trading University]. (2018, November 15). Options Trading U: How to Sell Naked Puts For Income [Video File]. Retrieved from https://followthemoney.com/options-trading-university/

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Summary

Learn How To Get Paid While You Wait To Buy Your Favorite Stock

Questions

Where does the money that goes into your account come from when you sell naked put options?

What's a margin account?

Why would someone buy a put option? Meaning, what's the benefit of paying someone a premium to do something I could do myself when the stock gets down to a certain price?

How does the insurance analogy fit in with the anarcho-capitalism private insurance governance thing?

Notes

Okay, so I'm selling the right for someone else to buy my stock at a lower price. Except I don't own the stock yet... but if the buyer is right, then I'll have to buy the stock and sell it to him at that agreed upon price.

I also get a premium in the meantime.

Wait, selling a put option is the obligation to buy the stock from the buyer at a pre-determined price.

The insurance company analogy is helpful, but still kinda hard.

Selling a put option is you saying "Hey mister, I'm going to sell you an option to be able to get out of that stock. You normally have that risk, now I'm going to assume that risk for you for a premium."