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Ask Alan 196: Why are We Receiving a Higher Return After Expecting a Lower Return?

Alan answers a question posed by Elliot, who asks:

Hi Alan,
Alan,
On 2/21/2022, I was looking to trade your 10- ultra low-risk weekly put strategy with Moderna (MRNA). With MRNA at $145.00, I was looking to sell the 2/25/2022 $118.00 put for $1.23. This week, Monday was President’s Day, so a 4-day week. I was expecting lower returns but instead was pleased to see annualized returns of about 100% Am I reading this trade correctly?
Frank

A 4-day put-selling trade with a 100% annualized return is analyzed. This started out as a 10- ultra-low-risk approach to but initial returns were significantly greater than expected. This video includes calculators and calculations and option-chain analysis with a real-life example with MRNA.

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About Alan Ellman

Alan Ellman loves options trading so much he has written four top selling books on the topic of selling covered calls, one about put-selling and a sixth book about long-term investing. Alan is a national speaker for The Money Show, The Stock Traders Expo and the American Association of Individual Investors. He also writes financial columns for both US and International publications along with his own award-winning blog.. He is a retired dentist, a personal fitness trainer, successful real estate investor, but he is known mostly for his practical and successful stock option strategies.

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