I am a little late posting this, and I feel bad because it has been a winner so far, but well, that's the way it is. A few days ago I sold a put spread on Chipotle, $CMG. I sold the $395 and bought the $375, both in May, for a possible $800 gain. Price when I took out the spread was around $398.
A few keys points:
May is really far out for me. This has a long time to work. I got the idea from Jim Cramer, he said he thought Chipotle would come back from the dietary issues they had, but it would take 18 months. We are now a year past that, so six more months would be around 18. I figure there is some leeway in that so I chose May. (And honestly, Cramer doesn't know, he may be better at estimating that stuff than some people, or maybe not)
The other thing I was instead of multiple puts at close strike prices, I did one with a wide spread. This gave me a decent return (40%) and lowered commissions. Risk is pretty high, but not so much I didn't take the wager.
So, just two days out of 60 or so $CMG is up 20 bucks. A lucky run. I am already up $150 or so. I don't think it's likely I will wait it out if I keep this profit. Although I haven't yet.
I have a couple more positions I'll get to over the next week. A teaser is that one involves $LABU.