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Strategies & Market Trends : Value Investing

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To: Mr.Gogo who wrote (50620)	1/21/2013 10:00:17 AM
From: Spekulatius	2 Recommendations Read Replies (1) of 78753

>>You can make a value investment by using options. Warren Buffet does it. And if Madharry has found a valuable way through options, why not. Its just a tool. Many times you say you are getting fills. This means you are putting purchase orders. Other people are selling put options with almost the same result...<< A limit order is not the same than writing a put. I can pull a limit order without cost, as long as it has not been executed. If I am short the put and want to exit the position , even before the strike price is hit, i need to buy back the put. If the market goes down, or volatility goes up, the put will go up in price, so this will cost me. This is a big difference between shorting a put and a GTC order. Another one is the higher friction cost (due to the higher bid/ask spread of the option). I agree with Paul that handling options requires a very different mind and skillset than value investments. I also agree that those threads that allow option talk have mostly deteriorated from my perspective, so it is better to keep the options angle out of this thread. Now I did think that the case that Madharry mentioned was interesting.

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