But you believe the stock is undervalued. And, if it goes down, you can roll down. I do that all the time. By buying, you would be out the amount you spent. Selling puts allows you to set a lower price that you would be willing to go long at. There is no right or wrong to any of this, but buying something with an expiration date is too stressful for my taste. You HAVE to see movement up in order to make money. I have breathing room even if there is a down trend for a bit and I already have the money in the bank doing something else for me. If I pick a strike that is 15-20 percent off the current value as you do with calls, I would be getting a huge discount.

And something else I think I have said before, and that is that I really don't look at ROI in terms of percentage. I really don't see the point in annualizing out a short term investment. It seems silly to me because you can't guarantee you will do that for the entire year, and if you only do it once it is nothing but something to puff out your chest over that means nothing. I just look at bottom line dollars made. fwiw, ymmv.


Edit: Oh, and I will give you the tax efficiency thing. Biden is gonna rape short term investors.

Edit 2: AMZN Jan 23 $3400 Puts are $440. I think that is an undervalued stock for that far out. But I won't tie up that much margin for that long.