11-30-2018, 01:07 PM
(11-30-2018, 12:42 PM)crimsonghost747 Wrote: And that brings us to our second point.. well we all have our opinions but if the plan is to hold long term then I would certainly consider that a loss.
For example stock X is trading at $28 today. You have sold a put option with a strike of $30. You will be paying $3000 for something that is currently worth $2800. So I don't see any other way than saying "I lost $200 minus the premium".
Yeah, but at the moment the put is sold, the stock was trading at, say, $31. When you sell the put, you're saying that you'd be comfortable buying at $30. So if you had instead not sold the put and just waited for your price, and bought outright at $30, you'd STILL ride the shares down from $30 to $28. In this case, you come out ahead for having sold the put, by the amount of the premium. Or am I not seeing it right?