Selling Puts: Have Cash Will Travel Message Board

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Strategies & Market Trends : Selling Puts: Have Cash Will Travel

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To: Greg Higgins who wrote (893)	1/23/2000 8:06:00 AM
From: tyc:>	Read Replies (1) of 1235

In a subsequent posting I said <<So the first question one must answer is shall I hedge by shorting the common right away ? Not knowing microsoft, I haven't got a clue; but the charts and Technical indicators would help me. I would rather enter a hedge position close to the strike than wait until the profitability is at risk at the margin. Your posting vindicates my belief of the importance of hedging early and not waiting for the profitability of the short put to be theatened. However even if one is "too late", shorting the common would still be the correct way to hedge, assuming you believe the stock is continuing south. The delta of your straddle has become too "bullish" so you reduce it by selling stock. The important thing would be to be right in your timing when you lift the hedge.

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