One of my stop-loss orders triggered today. I used the proceeds to secure a new put position. I "sold to open" 9 contracts (900 shares) in SLV (iShares Silver Trust). These were $14 puts which I sold for just $0.25 each. They expire August 22, so this 1.78% return is generous for an 11 day commitment. The stock is trading at $14.09 now, so there's a good chance I'll get the shares. If I'm put the shares, I will immediately write covered calls on them. This is an income trade; I expect to make money by selling puts and calls on this stock, not capital gains from the stock itself.
The equivalent in real estate would be buying a house in a part of town where I don't expect property values to increase significantly. I would buy that house purely for rental income, not with plans to sell it later for a profit. If you aren't going to be writing covered calls on this stock, it isn't worth buying.
In addition, I'm making only $225 on the puts; a nice return for an eleven-day wait, but not huge (especially considering transaction costs). If I wasn't buying a large number of contracts, I would just buy the shares outright. For a smaller trade, it isn't worth the trouble or the wait.
