Prosecutor: You claim to have a risk free strategy for making money by selling puts. Is that correct?
Liz: No it's not risk free. I could lose if I'm not careful.
Prosecutor: Are you always careful??
Prosecutor: So you always make money??
Prosecutor: Then where is the risk?
Liz: In the hands of a mere mortal the strategy would involve risk.
Prosecutor: In other words because you're so brilliant you never lose.
Prosecutor: How long have you lived in an insane asylum??
Liz: I live in a mansion.
Prosecutor: I have your commitment papers. You have been judged to be delusional is that correct??
Liz: I don't agree with that diagnosis.
Prosecutor: The witness is excused.
To further confirm what Liza does, I did what she did with SLW options starting with the sale of 30 puts. I rolled and rolled all the while watching the SP drop to 18. I was never in danger of exercise. If I had been I would have had a loss of $1200 per contract. The SP is now back to over 28 and I have a very nice gain.
Why do you argue over a strategy you clearly don't understand. I own NTI stock. At a time when I was considering adding to my position, I decided to sell put options instead. I sold 22.5 puts for .8 at a time when the stock price was over 23. If exercised my break even would be 21.7. Now, the stock price is about 20.75. The current bid/asked on the put is 1.7/1.9. For Dec 22.5 it is 3.1/3.3. I could roll to Dec by buying the Sep for 1.9 and selling the Dec for 3.1 for a credit of 1.2. If I did that it would lower my break even to 20.5 if the Dec puts were exercised. However, my original intent was to add to my position so I intend to allow the exercise of the Sep puts. I will also be selling Dec 20 puts for 1.55 to possibly add further to the position. So, I'm averaging down on the price of the stock I own while collecting premium for the options I sell. If the stock recovers and the SP increases to the point I am tempted to sell for a nice gain I will sell at the money or even in the money call options.