01-02-2017, 12:22 PM
Kerim,
I'd agree--buying options successfully would involve some really insightful /intuitive readings of technical. Not really something as primarily a "buy and hold" guy I want to kill time learning more about that I do. On the other hand, selling puts and calls on stocks I intend to buy or trim anyway seems like a much less "intuitive" proposition.
For example, I bought EXR when it started its trip down at the end of summer. I bought a 1/2 position at $75, and then a full position at $70 (which is where I'm happy). So I have a position and a half. As it travels back up, I plan on selling the $75 position (first in, first out). Since I intend to sell this, and its ITM already, why not a sell a covered call?
I want to add to my position in V, but not at this price. I want the stock--and will buy more eventually-- but not at this price (if I can help it). So why not sell a put?
Of course, the risk is in what opportunities might present themselves while your stock/cash is tied up in the option. However, if its stock you intend to sell (but don't mind if you keep) or a stock you intend to buy (but not at this price), it seems the risk/reward profile is positive.
But again, my entire conversation is academic, as I’ve never done any of what I'm talking about ;-)
Ronn
I'd agree--buying options successfully would involve some really insightful /intuitive readings of technical. Not really something as primarily a "buy and hold" guy I want to kill time learning more about that I do. On the other hand, selling puts and calls on stocks I intend to buy or trim anyway seems like a much less "intuitive" proposition.
For example, I bought EXR when it started its trip down at the end of summer. I bought a 1/2 position at $75, and then a full position at $70 (which is where I'm happy). So I have a position and a half. As it travels back up, I plan on selling the $75 position (first in, first out). Since I intend to sell this, and its ITM already, why not a sell a covered call?
I want to add to my position in V, but not at this price. I want the stock--and will buy more eventually-- but not at this price (if I can help it). So why not sell a put?
Of course, the risk is in what opportunities might present themselves while your stock/cash is tied up in the option. However, if its stock you intend to sell (but don't mind if you keep) or a stock you intend to buy (but not at this price), it seems the risk/reward profile is positive.
But again, my entire conversation is academic, as I’ve never done any of what I'm talking about ;-)
Ronn