Sofi Technologies (SOFI) stock has trending higher and is showing positive accumulation on the breakout.

One bad thing about SOFI stock is that it doesn't pay a dividend.

But what if we could use options to manufacture our own dividend?

Does SOFI Pay a Dividend?

Let's say I have $2,000 to invest into SOFI stock, I could simply buy 100 shares and hope the stock rises.

But, if I want a more conservative play, I could sell a December 19, 2025 put with a strike price of $20 and set aside the $2,000 in case I am assigned on the short put.

That $20-strike put generates around $290 in option premium in around five months.

So, my $200 investment into SOFI is giving me a 38% annualized "dividend".

Risks of the Trade:

Much like owning SOFI shares, if the stock drops, I'm going to lose money in the short-term.

If SOFI is below $20 in December, then I will be forced to buy 100 shares at $20.

The breakeven price is equal to the strike price less the premium received, which in this case would be $17.10. 

So if SOFI is below $17.10, at expiration the trade loses money. 

But, if SOFI stays above $20 then I achieve a 38% per annum return when the put expires worthless.

Cash secured puts are a bullish strategy but are considered slightly less bullish than owning Sofi stock because the potential gains are limited to the premium received.

The second risk with the trade is that if SOFI stock goes on a huge rally, we miss out on any upside. The most we can make is the $290 from the option premium.

Greeks and Equivalent Exposure Level

The $20-strike put currently has a delta of 39, so selling this put gives an exposure roughly equivalent to owning 39 shares of SOFI stock, although this will change as the stock moves up and down.

It also means the put has a roughly 61% chance of expiring worthless.

One method which can help cut the risk is to turn the trade into a spread and buy a $15-strike put. This turns the trade into a bull put spread and cuts the risk from $1,710 to around $20.

There are lots of interesting scenarios you can create with options.

Company Details

The Barchart Technical Opinion rating is a 100% Buy with a Strongest short term outlook on maintaining the current direction.

Long term indicators fully support a continuation of the trend.

The market is in highly overbought territory. Beware of a trend reversal.

SoFi Technologies Inc. provides consumer-focused financial technology platform. SoFi Technologies Inc., formerly known as Social Capital Hedosophia Holdings Corp. V, is based in PALO ALTO, Calif.

Implied volatility is currently 70.51% compared to a twelve month low of 41.40% and a twelve month high of 115.21%.

Of the 21 analysts covering SOFI, 6 have a Strong Buy rating, 2 have a Moderate Buy rating, 8 have a Hold rating, 2 has a Moderate Sell rating and 3 have a Strong Sell rating.

Please remember that options are risky, and investors can lose 100% of their investment. This article is for education purposes only and not a trade recommendation. Remember to always do your own due diligence and consult your financial advisor before making any investment decisions.