(01-11-2020, 12:04 PM)NilesMike Wrote: Looks like the price was $2300 +/- per contract?Otter,
Why so far OTM?
Why an outright Put buy instead of a bear put spread?
A spread of 460/410 also cost 2,300 per and would give you a MUCH wider area (time and price) in which to profit.
I hope the bottom falls out for you!
Hope you stick around and don't take our comments in a negative way. We are glad you are here. We also chat some off the threads.
A straight put or call purchase is a good way to get a feel for the way the option will run vs SP. 300 is way out of the money but TSLA option prices are pretty crazy. I won't be surprised if TSLA revisits sub 300. If China goes well at all it may not be through running though. We'll know soon. The option is long enough that he will have time to adjust it if he wishes. (provided it doesn't launch to 750 soon of course).
Back to boring, I mean conservative lol.... I continue to sell 10-15 puts every 4-6wks on my UTEs and Big Pharma. I try to diversify some so I have another 10 in defense stocks, healthcare REITS, MET, ADM, CSCO, LEVI etc. I am already long most of these stocks but this game is working well. My dividend stream is nice, but most months I make a lot more income from expired puts and calls. The boring stocks stuck in trading ranges work best. The premiums aren't huge, but the success rate is very high. Little chance the stocks runs away from me. Don't try this with AAPL or MSFT
Some of my boring stocks have moved only 10% the past year, but it's pretty stress free to double that in total return while actually only owning half the shares. I have no intention of stopping until the market drops hard for six months and completely forces me in with all my stock money. As long as I am OK with owning the underlying stocks, and don't put myself in a position to be extremely over weighted in anything, I don't think I will regret it. It forces me to remain a little cashy. If there is anything that surprises me, it;s how many attempts it can take to get forced into a stock through a put exercise. Sometimes they just run away, and it takes some discipline to wait for them to come back to me, or just move on.