SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Options
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: TRCM who wrote (2567)2/9/2000 1:05:00 PM
From: SecularBull  Read Replies (2) of 8096
 
Let's use CREE (a real company) as an example. It's trading at $142. If you sell the March or February $130 puts, you can collect roughly $10 and $4 respectively. That means that if the stock is put to you, you don't lose any money until it drops under $120 and $126 respectively. The underlying premise is that you would like to be an owner of CREE for $120 in March or $126 in February. If it isn't put to you, then you pocket the premium, and move on. But that's not the goal in this strategy (it is a possible alternative benefit). You want it put to you, and you lower your cost by a few dollars here and there. The collected premium is rolled into your long position basis, and there is no immediate short term gain (I hate short term gains!)

The June $130-$150s at about $18-30 look very attractive (more so than the example above), depending on where you'd like to enter.

Hope this helps.

LoF
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News