You Calculated the Fair Value — Now Place the Order: Getting Paid to Wait for Microsoft at $350

A price sitting in your watchlist does nothing on its own

There's a place where investors who finish a valuation tend to stall. The number is done, and then nothing happens with it.

In my case, Microsoft's fair value at a 15% required return came out to $350, and my watchlist says $345. The stock trades at $397 — about 15% above where I want it.

Most people do one of two things here. They wait, or they give up waiting and buy at today's price. I use a third option: get paid while waiting.

Here's the structure in five steps. If options are new to you, the basics in Cash-Secured Puts: How to Get Paid to Wait will make this go faster.

1. Nail down your buy price as a number first

This only works when the buy price is already settled. The order of operations matters.

My $350 isn't a feel. It came out of a model: 7–13% revenue growth, 34–40% net margins, a 20–26x exit multiple, discounted at a 15% required return. Having that number is what lets me say the next sentence with a straight face.

"The second it hits $350, I'm buying it — no matter what."

Without that conviction, this becomes a dangerous gamble. With it, it's a tool. The difference isn't in the option. It's in the work upstream.

2. Why a cash-secured put instead of a limit order

A $350 limit buy order and a short $350 put get you to a similar destination, but one of them pays you along the way.

Here's the actual setup I looked at: August 14, 2026 expiration, $350 strike put. Someone pays me $4 per share, and in exchange gets the right to sell me the stock at $350 if it's below that at expiration.

The commitment I'm making is simply: I'll buy at $350. That's what I was going to do anyway. The only difference is that I collect $4 up front for the promise.

It's called cash-secured because $350 × 100 shares — $35,000 per contract — gets tied up in the account. This isn't leverage. It's setting aside the money you were going to spend and getting paid to set it aside.

3. What the actual outcomes look like

Here's every scenario at expiration:

Price on Aug 14	Outcome	Effective result
Above $350	Not assigned	Keep the $4 premium and the cash
Exactly $350	May be assigned	Effective cost basis of $346
$330	Buy at $350	Effective cost $346 (down $16)
$300	Buy at $350	Effective cost $346 (down $46)

The common objection: "If it's $330, why buy at $350 when you could buy at $330?"

Fair question, wrong comparison. The right comparison is this strategy against my original plan — buy at $350. Under the original plan, if I buy at $350 and it falls to $330, I'm down $20 a share. With the put, I collected $4, so I'm down $16. Either way I bought at $350. Only one version has an extra $4 in it.

If you benchmark against perfectly timing the $330 bottom, this strategy always looks like a loser. But that timing was never an option you actually had.

4. What 14.8% versus 3.74% actually means

The $4 premium against a $350 strike is about 1.14%. Annualized over the time to expiration, that's roughly 14.8%.

The same cash in Treasuries was yielding 3.74%. Four times the return.

But that comparison needs an honest asterisk. The 3.74% is a return on principal that comes back guaranteed. The 14.8% comes with a condition attached: if the stock falls below $350, you own it. These are not the same risk.

Which is why the number only means anything under one premise — that ending up with the stock at $350 is a good outcome, not a bad one. I'd be happy to own Microsoft at $350, which is why I'll do this trade. Run this on a name where that premise doesn't hold and you get a pretty yield attached to a portfolio of things you didn't want.

5. Three situations where this is a bad idea

Let me be clear about when I don't use it.

First, when you don't want the stock at that price. Selling puts on a name purely because the premium is fat means you've replaced stock selection with yield chasing. And a fat premium usually means the market is pricing in real downside for a reason.

Second, when you need the cash for something else. That $35,000 is locked until expiration. If a far better opportunity shows up in the meantime, you can't move. That opportunity cost isn't reflected anywhere in the premium.

Third, when the stock runs. If Microsoft goes to $500, I made $4 and that's it. I miss the entire move. This strategy trades away the big upside in exchange for premium. If your conviction is genuinely high, just buying the shares may be the better trade.

Putting it together

Valuation produces the number. This strategy turns the number into an executable order. Either one alone is half a process.

Options without a valuation means chasing premium into positions you never wanted. A valuation without an execution plan means sitting on a price that never arrives, earning nothing, until impatience wins and you buy high anyway.

What I'm doing is simple. I set my price at $350, and while the market makes its way there, someone else is paying me for the wait.

FAQ

Q: What if the stock crashes to $250? A: You buy at $350 and, after the $4 premium, you're down roughly $96 a share on paper. That's the real risk. But note it's only $4 different from executing your original plan of buying at $350. The option didn't create the loss — the decision to buy the company did.

Q: If it drops below $350 before expiration, am I assigned immediately? A: American-style options can be exercised early in theory, but in practice assignment usually clusters near expiration. Early assignment odds rise around ex-dividend dates and when the option is deep in the money. Which is why you should only size this at an amount you're comfortable being assigned on.

Q: Should I go further out in time to collect a bigger premium? A: The absolute dollars go up, but the annualized return usually goes down and your cash is locked up longer. I prefer a few weeks to a couple of months. I'd rather get frequent chances to reassess when conditions change.

Q: Is this a beginner strategy? A: The mechanics are simple, but the prerequisites aren't. You need to be able to value the company yourself, you need the cash to actually buy at the strike, and you need to be willing to hold the shares for years if assigned. Missing any of the three means the valuation practice should come first.