Acquiring Adobe Stocks at a Discount: An In-Depth Look at Selling ITM Put Options

Behind Closed Doors: The Multibillion-Dollar Deals Shaping Global Markets

Bullish outlook - buying stock using ITM put options

Dipping into the insights shared in our series, selling an in-the-money (ITM) put option emerges as a strategy to potentially acquire Adobe stocks at a discount.
 
 

Strategy: selling an in-the-money put option

  • Trade setup:
    • Action: SellToOpen
    • Quantity: 1
    • Expiry: 15-Sep-2024
    • Strike: 550
    • Premium: $18.90 (per share)
  • Premium and risk:
    • Premium received: $18.90 x 100 (per contract) = $1,890
    • Max risk: Significant (potential obligation to buy the stock if it falls below the strike price)
    • Max reward: $1,890 (retained premium if Adobe stays above 550 at expiry)
  • Breakeven point: $550 (strike) - $18.90 (premium) = $531.10
  • Comparison with buying stock: This strategy can potentially allow you to acquire Adobe stocks at a discounted rate compared to the current market price, with the added benefit of premium retention

 

Behind Closed Doors: The Multibillion-Dollar Deals Shaping Global Markets

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