Short Put Option Strategy

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Comments

1. do you need to buy back the put option at expiration or can you just let it expire worthless? and still keep the money.
2. Holy macaroni, I bet not even half the people finished watching this video. this is a great video. kudos.
3. So there is unlimited risk if the underlying stock price moves below the strike price of the short put. In this case, I would be obligated to purchase the stock at the strike price. But at this point isn't the risk just as great as owning the stock outright? If the stock price dips below the put strike price than wouldn't I just be buying the stock? In other words, this just seems like a limit buy order that I get paid for. Is my thinking correct here?
4. Do commissions eat up a large percentage of your premium received? In other words, how do you combat commission costs? Thanks!
5. So when you're referring to your deep OTM strat you're referring to OTM above the put option strike price right ? I'm pretty sure it's a dumb question because if it was below the strike price your obligation would activate. I've been studying options for a couple of days now and am just trying to wrap my head around it all. It's pretty complicated to me but I feel like options once learned offer the most managable risk reward.
6. So if the option expires worthless i make the full credit?  In other words i'm not buying back the put thus not spending money to buy it back at?