<Mildly OT>
About disclaimers. I meant no disrespect to you personally. We both know a lot of people read these threads and this just covers me (so I think) from newbies, youngbies, maturebees, oldbies, and knowledgeablebees....<grin>. It especially covers me from folks that think that you sell options, take in money, and have little risk. Enough said.
Yes. I meant by downside protection that I would probably hedge up to half the short puts with lower cost long puts (insurance...in case of catastrophe), IE (**just an example!!: SELL 10 150's, buy 5 135's)
OR, here's another idea....
do a put bear credit spread (if possible...). IE, leg into a spread for a net credit and command a spread for no cost (** just another example: SELL 10 150's PUTS at 5, stock appreciates, Buy 10 170's PUTS at 4) You command 20 points for no cost. As a matter of FACT, SOMEONE PAYED YOU $1 to command this spread (that's why it's called a credit spread...you GET MONEY NO MATTER WHERE THE STOCK CLOSES). Your max gain is at closing price on the stock of 150, or below. At 0-150 you make 21, and 170 to infinity you make 1.
Have fun!!
Steve |
