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Strategies & Market Trends : Option Trades -- Ignore unavailable to you. Want to Upgrade?

To: Jeffrey Beckman who wrote (490)1/17/1998 12:55:00 PM
From: zx  Respond to of 2341
 
hi Jeffrey, buying puts for protection is a difficult subject.
it sounds like you have some good ideas for your protective puts.
have you considered selling calls on stock you own.

if you open long puts it takes money from your account, and the
money/put value cannot be used to buy anything else or counted
as money in your account.
you don't have to own the stock for long calls and puts.
with long calls and puts your amount at
risk is known.

uncovered options are different.
you need have lots of equity in your account.
the amount varies with the brokerage firm you deal with and the
trades you do.
they have to give you permission to sell covered and uncovered equity options. ag



To: Jeffrey Beckman who wrote (490)1/18/1998 10:21:00 PM
From: ----------  Read Replies (1) | Respond to of 2341
 
Jeff:

Allow me to play devil's advocate.

If you want downside protection AND want to play the volatility
swings in your stocks, why not simply use sell and buy stops?

The advantage is, you get the job done with fewer transactions,
and you eliminate the option premuims altogether.

Not a recommendation, just food for thought.

Doug


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