mbur18

Riding the Bull by Writing Puts on Large-Caps - Barron's

By selling a put instead of buying the share you do sacrifice the upside potential, but your risk is actually a bit less than buying the shares. Say KO is trading at 52: if you sell a 50 put for $1 and the stock falls to 45 at expiration, you're down $400 net. If you bought at 52, you'd be down $700.