The song remains the same - the stock can only go to zero. The upside of a put is effectively capped at (strike price minus stock price) * 100. Going long via shares or calls is unlimited.
Right, but the price of the put is much less than the price of the stock, and the price of the put is the denominator.
Right now, Walmart is at $91.34, and you can buy a put at $88 expiring on 24th January for $0.18 [1]. If you buy one, and the stock goes to zero by then, you spent $0.18 and gained $88, a 488x return. January 2026 at $86.67 is $5.35 - a mere 16x return.
You'd spend $0.18 per share, yes, but the option's price is $18, not $0.18. So your return would be roughly 4.1x, not 488x. Remember options contracts are counted in hundreds, so $0.18 is the price per share, not per contract.
The song remains the same - the stock can only go to zero. The upside of a put is effectively capped at (strike price minus stock price) * 100. Going long via shares or calls is unlimited.
Right, but the price of the put is much less than the price of the stock, and the price of the put is the denominator.
Right now, Walmart is at $91.34, and you can buy a put at $88 expiring on 24th January for $0.18 [1]. If you buy one, and the stock goes to zero by then, you spent $0.18 and gained $88, a 488x return. January 2026 at $86.67 is $5.35 - a mere 16x return.
[1] https://www.nasdaq.com/market-activity/stocks/wmt/option-cha...
You'd spend $0.18 per share, yes, but the option's price is $18, not $0.18. So your return would be roughly 4.1x, not 488x. Remember options contracts are counted in hundreds, so $0.18 is the price per share, not per contract.
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