Zhang,
you are talking about the risk/reward, I believe per S&P report, the worse it will go is about $8-10, however, the upside potential is huge.
Now, what it be a good idea to buy a put 12.5 put in addition to long stock which is the same as long calls. so if you buy it today at 15, the most you will lose on stocks is 2.5/shr, and the put will gain $3 to compensate. so your donwside risk is really low.
your upside potential might be $5-8, if you are willing to pay $1 for put, which means you only get $4-7. Well, we cannot be too greedy.
regards.
H. Jian Yin |
