From Theory To Practice - June 29, 2021 - Selling an ITM Put

published 4 weeks ago by tastytrade, Inc.

As career premium sellers at tastytrade, we know the power of putting the odds in our favor. Most of the time, this means taking the standard approach and positioning ourselves out-of-the-money with our new positions. But interestingly, the power of short premium still shines through if you initiate a position that is slightly in-the-money. While certainly an exception to the rule--and not something you would want to consider on a regular basis--the slightly ITM Short Put that we consider in WBA in the portfolio today illustrates this power perfectly.

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