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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: KevinD who wrote (11534)	9/17/1999 1:03:00 AM
From: Greg Higgins	Respond to of 14162

KevinD writes: Is buying a put considered Long or Short? When you buy a put, you're long the put.

To: KevinD who wrote (11534)	9/19/1999 4:47:00 PM
From: articwarrior	Read Replies (3) \| Respond to of 14162

<Is buying a put considered Long or Short?> Buying a put is hoping for the share price to go down so this is a "short option". On the other hand you can look at buying a put on shares you own as an insurance policy that if the price of your stock goes down your put option increases in value limiting your down side in the stock by the cost of the put. The advantage of doing this saves your tax dollars as well and if you sell a call and buy a put you have effectively hedged your position with the proceeds from selling a covered call. If you had a stock run up quite a bit in a short period of time the put option is excellent to lock in profits for a limited period of time. I like driving my car with insurance cause I can't afford the cost of the repairs...I just look at puts the same way. Good Trading Artic