This is crazy. Someone is willing to pay me $750 to buy
$AMZN at a major discount to today's price.
It's called a cash-secured put, and here's how it works:
$AMZN trades around $249 right now. I can sell the $225 put expiring January 15, 2027 and collect about $750 up front.
By selling that put, I'm agreeing to buy 100 shares of
$AMZN at $225 if the stock is below that price at expiration. I set aside $22,500 in cash to cover the purchase, which is where the "cash-secured" part comes from.
The buyer on the other side is paying me $750 for the right to sell me those shares at $225. That money hits my account the day I sell the put, and it's mine to keep no matter what happens.
From there, one of two things happens:
1.
$AMZN stays above $225 through January 15. The put expires worthless, I keep the $750, and my cash is freed up. That's a 3.3% return in 113 days, roughly 10.8% annualized.
2.
$AMZN closes below $225. I buy 100 shares at $225, but since I already collected $750, my real cost is $217.50 per share. That's about 12.6% below where it trades today.
The risk is the stock falling well below your strike. If
$AMZN dropped to $180, you'd still have to buy at $225 and would be sitting on a loss of $3,750 versus the market price, even after the premium. That's why you only sell puts on companies you'd be happy to own at that price.
Not financial advice. I share these for education.