gvtucker....re: dell puts
appreciate your example..you state the "cboe trader" will have the put excerised against him if the stock below ninety...hasn't he taken the buy side of the trade..isn't the put excericised to the seller?, i also believe you state the "cboe trader" will take the sell side of the call trade...if he is the seller, how is he able to excerise above 90, isn't that the right of the buyer?
perhaps it's too early in the a.m for me to understand...as far as "apples to oranges", please before you comment and use such words as "bunk", follow the thread....i have NEVER advocated the use of margin and only advocate selling of puts if you have the capacity to have the underlying put to you.
if i read your postings you state it is better to use margin to buy the underlying than to buy calls/sell puts as pal stated with opm...
let's remain SIMPLISTIC, not worry about how much a cboe trader makes or doesn't make, because it doesn't impact on my or pal's positions...
so everyone can understand...basic premise:RAISING CASH FOR FUN AND PROFIT:
YOUR WAY (correct me if i misunderstood you):
BORROW against MARGIN, pay INTEREST, and ultimately REPAY margin.
MY WAY
SELL puts against cash or capacity, yes using up credit line(but that's what the lord meant it for),RECEIVING INTEREST, and a strong probability of NO LOAN TO REPAY...
give the trader his due, let him annualize at 9.2%, i've annualized over the years with my unsophisticated only worry about what i'm doing method at high double to low triple digit returns...there is risk in any investment, there is also reward...selling puts is fairly conservative if you never stray from some basic rules...which i have posted ad infinitum..
thanks your input...much welcomed, good luck, ed a. |
