Sell Short AMZN Put Options (Out-of-the-Money) to Make a 2.0% Monthly Yield

Shorting Amazon.com (AMZN) puts that are below today's trading price (i.e., out-of-the-money) can provide an approximate one-month yield of 2.0%. This allows an investor to set a lower buy-in target price. This article will show how this works.

AMZN is at $219.40, up about 1% for the day. It is still below recent highs of over $241 per share, reached earlier this year. I discussed Amazon's strong free cash flow (FCF) and related price targets in a June 2 Barchart article, “Amazon Stock Is Up, So What Is the Best Play Here?”