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.
Technology Stocks : Identix (IDNX)
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Wendell Holmes who wrote (1211)5/23/1997 1:14:00 PM
From: Peter Caradonna   of 26039
 
Sorry Wendell, I did not communicate well. I ment to communicate that BUYING puts is a lock in hedging strategy for longs. For example if you buy the stock at 8.5 and it goes to 10.5, you may buy a 10 1 month put for 1/2 or so. This "locks in your profit at a cost of 1/2 point because the put will increase in value if the stock reverses. So in the example you have "locked" a 20% gain for the term of the put. If the stock continues to rise, the put will be worthless like an expired fire insurace policy. Selling puts is very risky because you are guessing the bottom, selling calls is risky because you are guessing the top. Buying puts or calls can hedge a long or short, respectively, so the future is protected for a time.

Sorry for the confusion, I'll be more carefull in the future.

peter
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