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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: Night Writer who wrote (11335)8/3/1999 7:02:00 PM
From: NateC  Read Replies (1) of 14162
 
I didn't mean to be condescending. I came to this thread looking for help and to make a
contribution. I apologize for any comment appearing to be condescending.

I understand selling the puts at $45 if you want to buy the stock. I don't understand how
the buyer hedges by selling the lower puts.

The act of buying the 45 strike puts is a hedge on the stock.
Selling the 40 strike puts now puts the 45 strike buyer at risk.

I don't understand why the 45 strike buyer would do this but I'm willing to learn.

NW

NW.....didn't think you sounded condescending

In looking at all of these trades.....it's hard to tell who did what....but there was combination of a 45 sold put, and a bought (long) 40 put....which looked like a classic bull put spread
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