I figured you had. I put that in for other who may be following this discussion.
The challenge I will have with my daughter (and son, too) is to teach her the values and principles of hard work, discipline, and dedication. I plan to keep her money hidden from her as long as I can.
Child raising is the toughest job I've ever had, and it's the one I've had the least training for! Well, my parents did me pretty well. So, at the difficult times, I try to figure out what They would have done. (I don't alway do what they would have, but it at least gives me a base to start from!)
On selling puts, I'm real conservative. I sell at strikes significantly below support. I don't sell puts on stocks that are in my account. I don't sell to full capacity.
You're absolutely right that short puts can eat up margin buying power in a bear market. There is no riskless trade.
Here's a strategy that I've used: Sold a put below support. The stock started to drop. When it reached the strike price, I sold the stock short. Stock continued to drop. Later, I got 'put'. But all that did was cover my short sale! So, at the end of the trade, I sold and bought the stock at the strike price, and collected the premium. Yes, I did have to pay some more in commissions, and I wasn't able to short right at the strike price (I think I lost 3/8 of a point), but it did a great job of protecting my downside! And, I kept most of my put premium.
Best,
Adairm |
